Bodie V Marani Complaint

Case 8:14-cv-00308-JLS-AN Document 1 Filed 03/03/14 Page 1 of 56 Page ID #:1
Note, a true and correct copy of which is attached hereto at Exhibit 1 (the
Convertible Note); Subscription Agreement, a true and correct copy of which is
attached hereto at Exhibit 2; and Common Stock Purchase Warrant, a true and
correct copy of which is attached hereto at Exhibit 3 (the Warrant). A dispute
has arisen between Bodie and Marani with respect to the proper computation of
Bodies debt, conversion rights and Warrant exercise.
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2.
With respect to the conversions of the Convertible Note, the dispute
arises out of the conversion prices applied to Bodies conversions of its debt into
Marani stock. Bodie contends that Marani was required to disclose to Bodie any
and all issuances of stock and other securities at prices below Bodies conversion
price, and, whenever such an event occurred, that Bodie was automatically entitled
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thereafter to the benefit of the lowest price applicable to any third party, if lower
than Bodies conversion prices. Such contention is based on sections 2.1(c) and
2.1(d) of the Convertible Note. Bodie contends that events occurred while the
Convertible Note was outstanding that triggered a conversion price adjustment
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pursuant to section 2.1(c); but because Marani failed to disclose to Bodie the
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events, stock issuances and terms thereof that would trigger a conversion price
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adjustment under the terms of the Convertible Note, as required by section 2.1(d),
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Bodie was unaware of such conversion price adjustment events and inadvertently
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converted its debt into Marani stock at conversion prices substantially greater than
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the prices to which Bodie was entitled under section 2.1(c) of the Convertible
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Note. Bodie contends that, computed at the proper adjusted conversion prices,
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Bodie would be entitled to at least 62 million shares of Marani stock in excess of
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what Bodie received upon the exercise of its conversion rights. Based on the
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market value of such shares following the conversions, Bodie could have sold such
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shares for more than $1 million.
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3.
In addition, Bodie contends that with respect to two conversions, in
November 2010 and November 2011, respectively, Bodie attempted to convert its
shares at conversion prices well below $.001 and was told by Marani that it could
CORRIGAN & MORRIS, LLP

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COMPLAINT- 2
not honor such conversions because its bylaws precluded Marani from issuing
shares below its stated par value of $.001. Accordingly, Marani insisted that Bodie
conversion prices be set at par value, instead of the prices computed under section
2.1(c) of the Convertible Note, resulting in a drastic reduction in the number of
shares issued to Bodie pursuant to such exercise. Bodie contends that Marani was
not entitled to reduce or limit Bodies contract rights based on such self-imposed
restriction and that Bodie is entitled to be made whole for damages suffered as a
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result of Maranis improper limitation on Bodies conversion rights.
contends that the damages suffered as a result of the par value restriction exceeded
$100,000.
4.
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Bodie
Separately, with respect to Bodies Warrant exercise on December 5,
2013, Bodie claims that Bodies own error in computing the number of shares to
which Bodie was entitled when it exercised its cashless warrant exercise to
purchase 4 million shares of Marani common stock under the Warrant, which
number was adopted by Marani, caused Bodie to be shorted by 181,820 shares of
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Marani common stock. Bodie suffered damages of at least $3000 as a result of
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such discrepancy in the number of shares issued to Bodie.
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5.
As a result of all of the foregoing, Bodie has suffered money damages
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in an amount in excess of this Courts judicial minimum, and in any event in
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excess of $1 million, in an amount to be determined at trial.
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6.
Bodie is informed and believes that Marani contends that Bodie
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converted all of its debt at conversion prices consistent with the proper
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interpretation of the Convertible Note and Warrant, and that it owes Bodie no more
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stock and no more debt.

PARTIES
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7.
Bodie is a Delaware corporation, whose sole officer is located in
Michigan.
8.
Bodie is informed and believes and based thereon alleges that Marani
is a Nevada corporation with its principal offices located in Tustin, California.

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JURISDICTION AND VENUE
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9.
This Court has jurisdiction over this action pursuant to 28 U.S.C.
1332(a)(2) in that the action is between a plaintiff corporation organized under the
laws of Delaware and managed in the state of Michigan and the defendant is a
Nevada corporation with its principal offices in the state of California; and the
matter in controversy exceeds the sum or value of $75,000, exclusive of interest
and costs.
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10.
Venue is proper in this judicial district pursuant to 28 U.S.C.
1391(a), in that it is a judicial district in which a substantial part of the events or

omissions giving rise to the claims occurred, or a substantial part of the property
which is the subject of the action is situated. Bodie is informed and believes that
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substantially all of the actions of Marani alleged herein took place from its
principal offices formerly located in North Hollywood, California and, thereafter,
in Tustin, California. Although the Convertible Note includes a choice of New
York venue, there appears to be insufficient nexus with the State of New York to
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provide a basis upon which to bring this action in its courts. Plaintiff would not
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oppose a motion to transfer venue to the District Court for the Southern District of
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New York, should the Court deem such a transfer to be warranted and just and
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provided the District Court for the Southern District of New York would accept
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such a transfer.
COMMON ALLEGATIONS
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11.
Paragraph 2.1 of the Convertible Note provides a mechanism to
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compute the conversion price for the debt obligations under that instrument. That
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provision provides, in relevant part:
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(a) The Holder shall have the right from and after February 14,
2010 and then at any time until this Note is fully paid, to
convert any outstanding and unpaid principal portion of this
Note and accrued interest, at the election of the Holder (the date
of giving of such notice of conversion being a "Conversion
Date") into fully paid and nonassessable shares of Common
Stock as such stock exists on the date of issuance of this Note,

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or any shares of capital stock of Borrower into which such

Common Stock shall hereafter be changed or reclassified, at the
conversion price as defined in Section 2.1(b) hereof (the
"Conversion Price"), determined as provided herein. Upon
delivery to the borrower of a completed Notice of Conversion, a
form of which is annexed hereto, Borrower shall issue and
deliver to the Holder within three (3) business days after the
Conversion Date (such third day being the "Delivery Date")
that number of shares of Common Stock for the portion of the
Note converted in accordance with the foregoing. The number
of shares of Common Stock to be issued upon each conversion
of this Note shall be determined by dividing that portion of the
principal of the Note (and any interest) to be converted, by the
Conversion Price.
(b) Subject to adjustment as provided for in Section 2.1(c)
hereof, the Conversion Price per share of Common Stock shall
be $0.04 for 180 days after the Closing Date ("Conversion
Price"). Commencing 180 days after the Closing Date, the
Conversion Price per share of Common Stock shall be equal to
the lesser of (i) $0.04, or (ii) seventy-five percent (75%) of the
average of the three lowest closing bid prices of the Company's
Common Stock for the twenty trading days preceding a
Conversion Date.
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(c) The Conversion Price and the number and kind of shares or
other securities to be issued upon conversion of this Note, shall
be subject to adjustment from time to time upon the happening
of certain events while this conversion right remains
outstanding, as follows:
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D. Share Issuance. So long as this Note is outstanding, if the

Borrower shall issue or agree to issue any shares of
Common Stock other than with respect to any Excepted
Issuances for a consideration less than the Conversion
Price in effect at the time of such issue, then, and
thereafter successively upon each such issue, the
Conversion Price shall be reduced to such other lower
issue price. For purposes of this adjustment, the issuance of
any security carrying the right to convert such security into
shares of Common Stock or of any warrant, right or option

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to purchase Common Stock shall result in an adjustment

to the Conversion Price upon the issuance of the abovedescribed security and again upon the issuance of shares
of Common Stock upon exercise of such conversion or
purchase rights if such issuance is at a price lower than
the then applicable Conversion Price.
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(d) Whenever the Conversion Price is adjusted pursuant to

Section 2.1 (c) above, the Borrower shall promptly provide
notice to the Holder setting forth the Conversion Price after
such adjustment and setting forth a statement of the facts
requiring such adjustment.
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Emphasis added.
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12.
In late 2013 and early 2014, Plaintiff, through counsel, made several
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written demands on Defendant, through its counsel, demanding compliance with
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sections 2.1(c) and 2.1(d) of the Convertible Note. Nevertheless, as of the date of
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this Complaint, the Defendant has failed and refused to disclose, during the life of
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the Convertible Note or thereafter, sufficient facts for Bodie to determine any
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adjustment in the Conversion Price and has not set forth a statement of facts that
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Defendant has conceded would require an adjustment to the Conversion Price.
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13.
On or around February 19, 2014, after Bodies final conversion
notice was given and the shares issued to it, Marani disclosed, for the first time, in
a filing with the Securities and Exchange Commission, that On November 7, 2013
the Company issued 30,000,000 free trading shares at a cost of $0.001, per share,
to Eco Investment Properties, the assignee of a portion of a certain promissory note
in the amount of $30,000. Because the Marani shares issued on November 7,
2013 were issued at a price that was a small fraction of the Conversion Price
applied to Bodies two later conversions, such conversions were executed at
conversion prices inadvertently inflated in computing the shares to which it was
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entitled. As a result, Marani issued to Bodie upon such conversions only a fraction
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of the number of shares to which Bodie was entitled upon making that conversion.
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14.
On February 19, 2014, upon learning that Marani had issued shares at
$.001 per share as early as November 7, 2013, Bodie made demand on Marani to
disclose all conversion price adjustment events during the pendency of the
Convertible Note, including all facts relevant to the November 7, 2013 issuance to
Eco Investment Properties referenced in Maranis February 19, 2014 SEC filing
documents, and to re-compute the number of shares due to Bodie pursuant to
corrected conversion prices. Marani failed and refused to do so, and, instead,
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unilaterally dictated that the matter was closed by Marani. Marani has failed to
comply with section 2(c) of the Convertible Note.
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Bodies conversions of its debt under the Convertible Note were made
on the following dates and conversion prices (the debt includes interest of
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$31,907.23 and principal of $100,000.00):

DATE
DEBT
CONVERTED
CONVERSION
PRICE
APPLIED
BY
MARANI
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10/3/2010
10/12/2010
10/25/2010
11/2/2010
11/2/2011
2/29/2012
3/25/2012
9/30/2013
12/2/2013
$ 9,333.33
$ 5,041.99
$ 4,500.00
$ 9,333.33
$ 9,333.00
$ 1,799.01
$ 5,000.00
$12,000.00
$50,000.00
.00188741
.00130083
.00054
.001
.001
.0001425
.000285
.0008
.0051
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1/23/2014
$25,566.57
.00705
Totals
$131,907.23
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CONVERSION
RATE
UNDER
SECTION
2.1(c) OF
CONVERTIBL
E NOTE
Unknown
Unknown
Unknown
Unknown
Unknown
Unknown
Unknown
Unknown
Not more
than .001
Not more
than .001
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COMPLAINT- 7
SHARES
DUE TO
BODIE
UNDER
SECTION
2.1(c) OF
CONVERTIBLE
NOTE
Unknown
Unknown
Unknown
Unknown
Unknown
Unknown
Unknown
Unknown
At least
50,000,000
At least
25,566,570
Unknown
NUMBER OF
SHARES MARANI
SHORTED BODIE
UPON
CONVERSION
Unknown
Unknown
Unknown
Unknown
Unknown
Unknown
Unknown
Unknown
At least 40,196,079
At least 21,940,107
At least 62,136,186
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With respect to the conversions on November 2, 2010 and November 2, 2011, the
$.001 exercise price was compelled by Marani on the grounds that the lower conversion price
dictated by section 2.1(c) of the Convertible Note was prohibited by the Companys bylaws
because the par value was $.001. Such limitation is not supported by the Convertible Note;
Warrant or Subscription Agreement. Indeed, the third paragraph of the Subscription Agreement
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represents that Maranis common stock has a par value of $.00001, not $001. Even if the
Maranis bylaws would prohibit Marani from issuing shares at below its par value, such
restriction is within the control of Maranis shareholders, not Bodie. Such a restriction, in the
face of an express representation by Marani to the contrary in the Subscription Agreement,
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cannot be wielded as a sword by Marani to avoid its contractual obligations to Bodie. Marani
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must make Bodie whole for the damages suffered as a result of its failure and refusal to issue the
number of shares to which Bodie is entitled under the terms of the Convertible Note, regardless
of the true par value of such shares.
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FIRST CLAIM FOR RELIEF
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Breach of Convertible Note
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17.
Plaintiff realleges paragraphs 1 through 16, inclusive.
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18.
On or around February 1, 2010, Bodie entered into a written
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agreement with Marani pursuant to the terms of the Convertible Note at Exhibit 1.
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Bodie complied with all of its obligations to Marani under the terms
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of the Convertible Note, including, without limitation, paying to Marani $100,000
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on or around February 1, 2010.
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20.
Marani breached its promises and covenants under the terms of the
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Convertible Note in at least the ways alleged above, including, without limitation:
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a. Marani failed to convert Bodies debt into stock at the conversion
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prices dictated by section 2.1(c) of the Convertible Note;

b. Marani failed to provide Bodie with notice of conversion price
adjustment events and all facts relevant thereto, pertaining to its
issuances of securities that would cause a conversion price
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COMPLAINT- 8
adjustment under section 2.1(c), despite its express obligation to do
so on a timely basis under section 2.1(d) of the Convertible Note.

c. Marani failed and refused to issue to Bodie shares at the
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conversion price dictated by sections 2.1(b) and 2.1(c) on the
grounds that such conversion price was less than Maranis
purported par value of $.001 in November 2010 and November
2011, and, in doing so, failed and refused to make Bodie whole for
such breaches.
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21.
As a direct and proximate result of such breaches by Marani, Bodie
converted substantially all of its debt at conversion prices that were very
substantially higher than the conversion price mandated by section 2.1(c) of the
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Convertible Note and the express promises therein made by Marani.

22.
As a direct and proximate result of such breaches by Marani, Bodie
suffered the loss of at least 62,136,186 shares of Marani Brands, Inc. common
stock and the cash proceeds of such stock had such shares been delivered on a
timely basis to Bodie, which Bodie alleges would exceed $1 million.
23.
In addition to the recovery of such damages in an amount to be
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determined at trial, which Bodie anticipates would be substantially higher than
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$75,000, Bodie is entitled to interest on all outstanding debt deemed owed prior to
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the maturity date of the Convertible Note, January 31, 2011, at the rate of 8% per
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annum, and 12% per annum thereafter on all outstanding balances pursuant to
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sections 1.2 and 1.3 of the Convertible Note. In addition, Bodie is entitled to
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recover its attorneys fees and costs in pursuing this action pursuant to section 5.6
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of the Convertible Note.
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SECOND CLAIM FOR RELIEF
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Declaratory Relief re Conversion Price And Shares Due To Plaintiff
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24.
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An actual and justiciable dispute exists between Bodie and Marani
with respect to Bodies right to have Marani disclose timely all price and stock

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COMPLAINT- 9
issuance data necessary to determine the correct conversion prices applicable to its
conversions of debt under section 2.1(d) of the Convertible Note; as well as what is
owed, in terms of money or stock issuances, to Bodie by Marani as a result of
adjustments to such conversion price under section 2.1(c) of the Convertible Note.
Bodie submits that it is entitled to such disclosure and to application of the correct
conversion prices as to all of its previous conversion, and Marani contends that the
matter is closed and that Bodie is entitled to no further information or retroactive
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adjustments to its conversion prices.

26.
Bodie is entitled to declaratory relief with respect to Maranis
disclosure obligations under the Convertible Note and the determination by this
Court of such issue is in the interests of judicial economy and the parties.
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THIRD CLAIM FOR RELIEF
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Breach of Warrant
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On or around February 1, 2010, Marani issued to Bodie the Warrant
attached hereto at Exhibit 3.
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29.
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of the Warrant.
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30.
Bodie complied with all of its obligations to Marani under the terms
Marani breached its promises and covenants under the terms of the
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Warrant by failing to issue to Bodie the correct number of shares after Bodie
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exercised its rights under the Warrant pursuant to its cashless exercise provision.
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Pursuant to section 2 of the Warrant, Bodie was entitled to exercise its Warrant
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based on a cashless exercise notice as to the entire 4 million shares represented by
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that Warrant. On or around December 5, 2013, Bodie exercised its Warrant rights,
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in their entirety, by sending to Bodie a warrant exercise notice, a true and correct
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copy of which is attached hereto at Exhibit 4.
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31.
Bodie made a computation error in that notice at Exhibit 4. The
Warrants exercise price was $.001. Thus, the 4 million shares generated a $4000
purchase price. To pay that $4000 on a cashless basis, a certain number of

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COMPLAINT- 10
shares would be deducted from the 4 million total to repay to Marani the $4000.
Because the fair market value of the Marani stock at that time was $.0165 per
share, as that term is defined in the Warrant, the number of shares to be deducted
from the 4 million share issuance was to be calculated as follows: $4000 divided
by $.0165. The result is 242,424 shares. The number of shares to which Bodie
was entitled was 3,757,576 (4 million minus 242,424). Another way of getting to
the same number is to follow the formula set forth at section 2 of the Warrant:
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4,000,000 (.0165-.001)/.0165, or 3,757,576.

32.
Unfortunately, in Bodies own exercise notice, Bodie miscalculated
the cashless exercise formula. As a result, Marani shorted Bodie by 181,820

shares pursuant to Bodies exercise of its 4 million Warrant shares, issuing instead
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only 3,575,756 shares.

33.
Marani breached its obligations to Bodie under the Warrant by failing
to issue to Bodie the additional 181,820 shares to which Bodie is entitled under the
terms of the Warrant.
34.
As a direct and proximate result of such breach by Marani, Bodie
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suffered the loss of 181,820 shares of Marani Brands, Inc. common stock and the
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cash proceeds of such stock had such shares been delivered on a timely basis to
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Bodie.
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35.
In addition to the recovery of such damages in an amount to be
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determined at trial, which Bodie anticipates would be approximately $3,000, Bodie
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is entitled to recover its attorneys fees and costs in pursuing this action pursuant to
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section 14 of the Warrant.
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PRAYER FOR RELIEF
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WHEREFORE, Bodie prays for relief and judgment against Marani, as
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follows:
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1.
Awarding compensatory damages in favor of Bodie against Marani
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for all damages sustained as a result of Maranis breach of the Convertible Note, in
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an amount exceeding $1 million to be proven at trial, including interest together

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COMPLAINT- 11
C9i~\tJ~l ""~tt ]
NEITHER THE ISSUANCE AND SALE OF TID!: SECURITIES REPRESENTED BY TillS
NOTE NOR TID!: SECURITIES INTO Wmcu THESE SECURITIES ARE CONVERTffiLE
HAVE BEEN REGISTERED UNDER TRE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLlJ: STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED PLEDGED OR ASSIGNED (I) IN THE ABSENCE OF (A)
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AIVIENDED, OR (B) AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY, IN ITS SOLE, BUT REASONABLE DISCRETION, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT
'To RULE 144 OR RULE 144A UNDER SAID ACT.
Issue Date:'PebruaryJ, 2010
Principal AmoWlt: $100.000

CONVERtIBLE NOTE
FOR VALUE RECEIVED, MaraniBrands, hie. a Nevada corporation (hereinafter called

"BOITower"), herehy promises to pay to the Bodie Investme)lt Group, we., (the "Holder"), without
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demand, the sum of one hWl.dred thousand Dollars {$1 00,000), with simple and unpaid interest thereon,
on February 1st, 20 II (one year after Closing nate) (the "Maturity Date"), if 110t paid sooner.
This Note has been entered into pursuant to the terms ofa Subscription Agreemel1t between the
Borrower and the Holder. Unless otherwise separately deflJled herein, all capitalh:ed tetms used in this
Note shall have the same meaning as is set forth in the Subscription Agreement. 111e following terms
shall apply to this Nate:
ARTICLE I
GENERAL PROVISIONS
1.1
wterest Rate. Sinlple interest payable On this Note shall accrue at the annual rate of
eight percent (8%), Accnled interest will be payable on the Maturity Date, accelerated or otherwise,
when the principal and remaining accrued but unpaid interest shall be due and payable.
1.2
Default Interest Rate. . After the, Maturity Date, accelerated or otherwise, a default
interest rate of twelve percent (12%) per annum shall apply to the amounts owed hereWlder.
J.3.
Conversion Privjl..!l,ges. The Conversion rights of the Holder as set forth in Article n of
only this Note shall remain in full force and effect iromediately from the date Ilereof and until the Note is
paid in full regardless of the occurrence of an Event ofDefault. The principal amowlt of the Note and the
remaiuing accrued but unpaid interest shall be payable. in full 0)) the Maturity Date, unless previou.sly paid
Of converted into Common Stock in accordance with Article II hereof.
ARTICLETI
CONVERSION RIGHTS
Tho Holder shall have the right to convert the entire principal amount under this Note and the
accrued but unpaid interest thereon into shares of the Borrower's Coromon Stock as set forth below.
2.1.
2/112010,1:31 PM ,
y~ Conversion into the Borrower's Common Sto\lk.
Exhibit 1, p. 000013
(a)
The Holder shall have the right &om and after February 14,2010 or sooner upon
the occurrence of an Event of Default and then at any time until this Note is fully paid, to convert any
outstanding and unpaid principal portion of this Note and accrued interest, at tbe election of the Holder
(the date of giving of such notice of mnversion being a"Conversion Date") into fully paid Wld
nonassessable shares of Common Stock as such stock exists on the date ofissuWlce of this Note, or WlY
shares of capital stock of Bon'ower into which such Cormnon Stock shall hereafter be changed or
reclassified, at the conversion price as defmed in Section 2. 1(b) hereof (tbe "Conversion Price"),
determined as provided herein. Upon delivery to the BOtTower of a completed Notice of Conversion, a .
form of which is annexed hereto, Borrower shall issue Wld deliver to the Holder within three (3) business
days after the Conversion Date (such third day being the "Delivery Date") that number of shares of
Common Stock for the portion of the Note converted in I).ccordance with the foregoing. The number of
shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing
that portion ofthe principal ofthe Note (and any interest) to be converted, by the Conversion Price.
(il)
Subject to adjustment as provided for in Section 2.1(0) hereof, the Conversion
Price per share of Common Stock shah be $0.Q4 for 180 days after the Closing Date ("Conversion
Price"). Commencing 180 days after the Cle>sing Date, the Conversion Price per share of Common Stock
shall be equal to the lesspr of (i) $0.04, or (ii) seventy-five percent (75%) of the average of the three
lowest closing bid prices of the Company's Cormnon Stock for the twenty trading days preceding a
Conversion Date. Ifthe Company files a Registration Statement for the Equity Line with Bodie
Investment Group within 30 days from closing of ~his Note, tben the Investor will agree to not convert for
ninety days from closing.
(c)
The Conversion Price and the number and kind of shares or other securities to be
issued upon conversion ofthis Note, shall be subject to adjustment from time to time upon the happening
of certain eveuts while this conversion right remains outstanding, as follows:
A.
Merger, Sale of Assets, etc. If the Borrower at any time shall consolidate
with or merge into or sell orconwy all or substantilj1ly all its assets to any other corporation, this Note, as
to the unpaid principal portion thereof and accmed interest th.eteo.l1, shall thereafter be deemed to
evidence the right to purchase such number and kind 'of shares or other securities and property as would
have been issuable or distributable on account of such consolidation, merger, sale or conveyance, upon or
with respect to the securities subject to the conversion or.purchase right immediately prior to such
consolidation, merger, sale or conveYance. The foregoing proviSion shall similarly apply to successive
trWlsactions of a similar natnre by any such successor or purchaser. Without limiting the generality of the
foregoing, the anti-dilution provisions of this Section shall apply to such securities of such successor or
purchaser or surviving entity of the surviving corporation after Wly such consolidation, Inerger, sale or
conveyance.
B.
Reclassification, elc. If the Borrower at any time shall, by
reclassifi.cation or otherwise, change the Common Stock into the same or a different number of securities
OfWlY c.lass or classes of the Borrower's capital stock that may be issued or outstanding, this Note, as to
the unpaid princ.ipal amount thereof and accrued interest thereon, shall thereafter be deemed to evidence
the right to purchase an adjusted number of such securities and kind of securities as would have been
issuable as the result of such change with respect to the sbares of Common Stock subject to the
cOl1vel'sion of tbis Note immediately prior to such reclassification Of other change.
C.
Stock Splits,. Com.binations and Dividends, Tf the shares of Cormnon
Stock are subdivided or combined into a greater or smaller number of shares of Cormnon Stock, or if a
dividelld is paid on the Common Stock in shares of Commoll Stock, the Conversion Price shall be
propo.ctionately reduced in case of subdivision of shares or stock dividend or proportionately increased in
the case of combination of shares, in each such case by the ratio which the total number of shares of
Common Stock outstanding immediately after such event bears to the total number of shares of Common
Stock outstanding immediately prior to such event.
D.
Share Issuance. So long as this Note is outstanding, if the Borrower
shall issue or agree to issue any shares of Common. Stock other than willI respect to any Excepted
Issuances for a consideration less than the Conversion. Priee in effect at the time of such issue, the,n, and
thereafter successively upon each such issue, the Conversion Price shall be reduced to such other lower
issue price. For purposes of this adjustment, the issuance of any security carrying the right to convert
sneh security into sh;tres of Common Stock or of any warrant, right or option to purchase Common Stock
shall result inan adjustment to the Conversion Pri.;e upon the issuance ofthe above-described security
and again upon the issuance of shares of Common Stock upon exercise of such conversion or purchase
rights if such issuance is at a price lqwer than the then applicable Conversion Price.
(d)
Whenever the Conversion Price is adjusted pursuant to Section 2.1 (0) above, the
Borrower shall promptly provide notice to the Holder setting forth the Conversion Price after such
adjustment and setting forth a statement ofthe facts requiring such adjustment .
.
(e)
The Borrower will reserve from its authorized and unissued shares of Common
Stock, 40,000,000 shares of Common Stock, for this Note (which will be included ill the shares for the
equity line). The Borrower represents that upon issuance, such shares of Common Stock will be duly and
validly issued, fully paid and non-assessable. The Borrower agrees that its issuance of this Note shall
constitute full authority to its officers, agents, and transfer agents who are charged with the duty of
executing and issuing stock certificates to ex.ecute and issue the nc<:essary certificates for shares of the
Borrower's Common Stock upon the conversion of this Note.
"
2.2
OptioQal Redemption ofPrincipal&!!.ount. Provided an Event of Default has not
occurred, whether or not such Event ofDefault has been cured, then until the Maturity Date, the Borrower
will have the option of prepaying the outstanding Principal Amount of this Note ("Optional
Redemption"), in whole or in part, by paying to the Holder a sum of money equal to one hundred percent
(100%) of the Principal Amount to he redeemed, together with accmed but unpaid interest thereon and
any and nil other sums due, payable to the Holder arising under this Note or any Transaction Document
through the Redemptioll Payment Date as defined below (the "Redemption Amount"). Borrower's
election to exercise its right to prepay must be by notice in writing ("Notice of Redemption"). The Notice
of Redemption shall specifY the date for such Optional Redemption (fue "Redemption Payment Date"),
which date shall be three (3) business days after the date ofthe Notice ofR.edemption (the "Redemption
Period n ). A Notice ofRedenlption shall not be effective with respect to any portion of the Principal
Amount for which the Holder has a pending electIon to convert pursuant to Section 2.1, or in connection
with a conversion initiated by Holder during the Redemption Period. A Redemption Notice may be
given not more than two times. On the Redemption Payment Date, llle Redenlption Amount shall be paid
in good funds to the Holder.
2.3
No Fractional Shares. No fractional shru:es of Common Stock shall be issued upon
conversion of this Note, but an adjustment in cash will be made, in respect of any fraction ofa share
(which will be valued based on the Conversion Price) which would otherWise be issuable upon the
surrender of this Note for conversion and a check in the amount of the value of such fractional .share shall
be delivered to the Holder.
2.4
Method of Conversion. This Note may be cOnverted by the Holder in whole or in part as
described in Section 2.l(a) hereof-Upon partial conversion of this Note, anew Note containillg the same
date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the
Holder for the principal balance of this Note and interest which shall not have been converted or paid.
2.5
;tv1!!,1{imum Conversion. The Holder shall not be entitled to convert on a Conversion Date
that amount of the Note in connection with that number ofshares of Common 'Stock which would be in
excess of the sum of (i) the number of shares of CC!mmon Stock beneficially owned by the Holder and its
affiliates on a Conversion Date, and Oi) the number. of shares of Common Stock issuahle UpOll the
cOllversion of the Note with respect to which the determination of this provision is being made on a
Conversion Date, which would result in beneficial ownership by the Holder and its affiliates of more than
9.99% of the issued and outstanding shares of Common Stock of the BOITower on such Conversion Date.
For the purposes of the I?rovision to th.e immediately precedillg sentence, beneficial ownership shall be
detennined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and
Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall llot be limited Waggregate
conversions of only 4.99% and aggregate conversioll by th.e Holder may exceed 4.99%. The Holder shall
have the authority and obligation to determine whether the restriction contained ill this Section 2.5 will
limit any conversion hereunder alld to the extent that the Holder determines that the limitation contained
inlhis Section applies, the deteonillation of the amOUll! of the Note which is convertible shall he the
responsibility and obligatioll of the Holder.
2.6
Egoily Line Draw. The Compauy will be obligated to draw down from the Equity Lille
provided for in the Trausaction Documents to commence to redeem the outstanding principal amonnt of
this Note within fifteen (15) calendar days that the registration statement for the equity line declared
effective. The Company's obligations pw'Suant to this Section 2.6 are subject to the terms and provisions
of the agreements governing the equity line.
ARTICLE ill
EVENT OF DEFAULT
The occurrence of any of the followillg events of default ("Event of Default") shall, at the option
of the Holder hereof, make all sums of principal and accnled illterest then remaining unpaid hereon and
all other amounts payable hereunder immediately due and payable, upon demlllld, without presentment or
grace period, all of which hereby are expressly waived, except as set forth below:
3.1
Failure to Pay Principal or Intere~t. The Borrower fails to pay any principal, interest or
other sum due under this Note when due III1d the s~rne is not cured within 5 busilless days from the date.
3.2
Breach of Covenant. The Borrower breaches any material covenant or other material
teon or conditioll of the Subscriptioll Agreemellt or this Note in any material respect and such breach, if
subject to cure, continues for a period of twellty (20) days after written notice to the Borrower from the
Holder.
3.3
Breach of Representatiolls and Warrauties. Any material represelltation or warranty of
the Borrower made herein, in any Transaction DocUIIlent, or in lilly agreement, or certificate given in
writing pursuant hereto or in cOMection herewith or therewith shall be false or misleading in any material
respect as of the dale made aud as of the Closing Date.
3.4
Liquidatioll. Any dissolution, Jiquidati.oh or winding up of Borrower or any substantial
portion of its busilless.
3.5
Cessation of Operations. Any c;;ssation of operations by Borrower or Borrower is
otherwise generally unable to pay its debts as such debts become due.
3.6
Merger. The merger, consolidation or reorganization of Borrower with or into another
corporation or person or entity (other than with or into a Wholly-owned subsidiary), or the sale of capital
stock of Borrower by Borrower or the holders thereof, ill any case Ullder circumstances in which the
holders of a majority of the voting power ofthe outstanding capital stock of Bon'ower immediately prior
to such transaction shall own less than a majority in voting power of the outstanding capital stock of
Borrower or the surviving or resulting oorporation or other entity, as the case may be, immediately
following such transaction.
3.7
Receiver or Trustee. The Borrower shall make' an assignment for the benefit of creditors,
or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its
property or business; or such a receiver or trustee shall otherwise be appointed without the consent of the
Borrower jfsuc.h receiver or trustee is not dismissed within thirty (30) days ofappointment.
3.8
Judgments. Any money judgment, writ or similar final process shall be entered or filed
againstthe Borrower or any of its property or other assets for more than $100,000 based upon a final
judgment by a court of competent jurisdiction for which no further appeals are possible.
BauknJt,1:tcy. Banknlptcy, insolvellCy,reorganization or liquidation proceedings or other
3.9
proceedings or relief under any bankruptcy law or any law, or the issuance of any notice in relation to
such event, for the relief of debtors shall be instituted by or against the Borrower.
3.10
Delisting. Failure of the Borrower's Common Stock to be listed for trading or quotation
. ,
on the OTe BB for aoy reason.
3.11
Stop Trade. An SEC or judicial stop trade order or Principal Market trading suspension
with respect to the Borrower's Common Stock that lasts for five (5) or more consecutive trading days.
3.12
Failure to Deliver Common Stock or Replacement Note. The Borrower's failure to
deliver Common Stock to the Holder pursuant to and in the form required by this Note and Sections 7 and
II ofthe Subscription Agreement, or, if required, a replacement Convertible N~te more than five (5)
business days after the required delivery date of such Common Stock or replacement Convertible Note.
3.13
Reservation Default. The failure by the 13orrower to have reserved for issuance upon
conversion of the Note the number of shares of Common Stock as required in the Suhscription
Agreement.
3.14
Cross Default. A default by the Borro"",,,,r ofa material term, covenant, warranty or
undertaking of any other agreement to which the Borrower and Holder are parties, or the occurrence of a
material event of defuult.under any such other agreement which is not cured after any required notice
and/or cure period.
3.15
Reverse Splits. The Borrower effectuates a reverse split of its Common Stock, unless
th~ Company provides the Holder with written notice of the decision of the Company's Board of
Directors to transmit documelltation to authorize the reverse stock split-within five (5) business days of
sucp. decision.
3.16 Financial Statement Restatement. A material restatement of any :financial statements filed
by the Borrower after the date of this Note, if the result of such restatement would, by comparison to the
unrestated financial statements, have constituted a Material Adverse Effect.
ARTICLElV
Intentionally Omitted
ARTICLE V
MISCELLANEOUS
5.1
Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder hereof in
the .exercise of any power, right or privilege hereunder shall operate as a w~ver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other or further exercise the.reof or
of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and
not exclusive of, any rights or remedies otherwise available.
5.2
Notices. AU notices, demands, requests, COIlSents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (a)
personally served, (b) deposited in the mail, registered or certified, return receipt requested, postage
prepaid, (c) delivered by a ~eputable overnight courier service with charges prepaid, or (d) 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 upon hand delivery or deliver)' by facsimile,
with accurate confiI1Ilation 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 snch delivery (if delivered other than ona business day
during normal business hOUfS where such notice is to be received), (ii) on the first business day following
the date deposited with an overnight courier service with charges prepaid, or (iii) on the third business day
following the date of mailing pursuant to subpart (b) above, or upon a~1ual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be: (I) if to the Borrower to:
Marani Brands, Inc. 13152 Raymer Street Suite IA North Hollywood, CA 91605, with a copy by
teJecopier only to: Martin Eric Weisberg, Esq., Attn: Martin Eric Weisberg, p.e., telecopier: (212) 888
5025, and (ii) if to the Holder, to the nanle, address and te1ecopy number set forth on the front page ofthis
Note, with a copy by te1ecopier only to YosefY. Manela Esq. 323-782-0828
.
5.3
Amendment Provision. The leon "Note" and all referenc,< thereto, as used throughout
thiS instrument, shall mean this instrument as originally executed, or iflater amended or supplemented,
.
then as so amended or supplemented.
Assignability. This Note shall be bhlding upon the Borrower and itg successors and
5.4
assigns, and shall inure to the benefit of the Holder and its successors and assigns. The Borrower may not
assign its obligations under this Note.
.
5.5
Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay.
the Holder hereof reasonable out-of-pocket costs of collection, including reasonable attorneys' fees in an
action in which the Holder prevails.
5.6
Governing Law. This Note shall be governed by and constrned in accordance with the
laws ofthe State of New York. Any action brought by either party against the other concerning the
transactions contemplated by this Agreement shall be brought only in the civil or state courts of New
York or in the federal courts located in the State of New York. Both parties and the individual signing
this Agreement on behalf of the Borrower agree to submit to the jurisdiction of such courts. The
p~vailing 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 Note is invalid or unenforceable under any applicable statute or mle
oflaw, then such provision shall be deemeq inoperative to the extent that it may -conflict therewith and
shall be deemed modified to conform to such statute or ruJe of law. Any such provision which may prove
invalid or unenforceable under any law shall not affect the validity or unenforceability of any other _
provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder froin
bringing suit or taking other legal action against the Borrower in any other jurisdiction to collect on the
Borrower's obligations to Holder, arlo enforce ajudgment or other decision in favour ofth" Holder.
5.7
Maximum Payments. Nothing contained herein shall be deemed to establish or require
the payment of a rate of interest or other charges in excess of the maximum rate permitted by applicable
law. In the event that the rate of interest required lobe paid or other charges hereunder exceed the
ma)l:imum rate permitted by applicable law, any payments in excess of such maximum rate shall be
credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.
5.8
Shareholder Status. The Holder shari not have rights as a shareholder of the Borrower
with respectto unconverted portions of this Note. 'However, the Holder will have all the rights of a
shareholder of the Borrower with respect to the shares of Common Stock to be received by HaIdet after
delivery by the Holder of a Conversion Notioe to the Borrower.
5.9
IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an
authorized offic6r as ofthelstday of February, 2010. MARAN! BRANDS, INC.
By:
&~R-
Name: .. argnt
ud
Title: Chief Executive Officer
WITNESS;
;:
:::
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SlJBSCRIPTION AGREEMENT
TIDS SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of February 1" 2010 by
and among Marani Brands, Inc., a Nevada corporation (the "Company"), and the subscriber identified on
the signature page hereto (each a "Subscriber" and collectively the "Subscriber").
WHEREAS, the Company and the Subscribers are executing and delivering this Agreement in
reliance upon an exemption from securities registration afforded by the provisions of Section 4(2),
Section 4(6) and/or Regulation D ("Regulation D") as promulgated by the United States Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "1933
Act");
WHEREAS, the parties desire that. upon the terms and subject to the conditions contained
herein, the Company shall issue and sell to such Subscribers, as provided herein, and such Subscribers, in
the aggregate, shall purchase up to (i) One Htmdred Thousand Dollars ($)00,000) (the "PUl'chllse Price")
ofprincipa\ amount of convertible promissory notes ofthe Company (the "Note" a form of which is
annexed hereto as Exhibit A, which Notes are convertible into shares of the Company's common stock,
$.00001 par value (the "C()n:lnIOU Stock"), and in the Note, (ii) shares ofthe Company's Commcn Stock
("Pun:based Shares"), and (iii) share purchase warrants (the "Warrants") in the form attached hereto as
Elrhibit B, to purchase shares cfthe Company's Common Stock (the "Warrant Shares"). The Notes,
Purchased Shares, shares of Common Stock issuable upon conversion of the Notes (the "Shares"), the
Warrants and the shares issuable upon exercise of the Warrants are collectively referred to herein as the
"Securities."; and
NOW, THEREFORE, in consideration of the mutual covenants and other agreements contained
in this Agreement, the Company and the Subscribers hereby agree as follows:
1.
Closing Date. The "Closing Date" shall be the date that the Purchase Prioe is transmitted
by wire transfer or otherwise credited to or for the benefit of the Company. The consummation of the
transactions contemplated herein shall take place at the offices ofYosefY. Manela 5455 Wilshire Blvd.
Suite 2123, Los Angeks, CA 90036, upon the satisfaction or waiver of all conditions to closing set forth
in this Agreement. Subject to the satisfaction or waiver ofthe terms and conditions of this Agreement,
on the Closing Date, each Subscriber shall purchase and the Company shall sell to each Subscriber a Note
in the principal amount designated on the signature page hereto and the anl0unt of Purchased Shares
determined pursuant to Section 2 below for the portion of the Purchase Price indicated, and Warrants as
described in Section 3 of this Agreement. 2. Shares. The Subscriber will receive Four Million Five
Hundred (4,500,000) COmmitment shares. These shares will have Registration Rights.
3.
Warrants. On the Closing Date, the Company will issue and deliver Twelve Million
Five Hundred Thousand (12,500,000) Warrants to the Subscriber. The number of Warrant Shares eligible
for purchase by the Subscriber is set forth in the signature page ofthis Agreement. The aggregate number
of the warrants for purchase by the Subscriber is Twelve Million Five Hundred Thousand (12,500,000).
The Warrants shall be exercisable until five (5) years after the issue date of the Warrants. The Warrants
will have and exercise price of $_0.04. Each holder of the Warrants is granted the registration rights set
forth in this Agreement. Th.e Warrant exercise price and number of Warrant Shares issuable upon
exercise of the Warrants shall be equitably adjusted to offset the effect of stock splits, stock dividends,
and similar events, as provided for in the Warrant.
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4.
Subscriber's Representations and Warranties. The Subscriber hereby represents and
warrants to and agrees with the Company only as to such Subscriber that:
(a)
Organization and Standing of the Subscriber. If such Subscriber is an entity,
such Suhscriber is a corporation, partnership or other entity duly incorporated or organized, validly
existing and in good standing under the laws of the jurisdiction of its incorpora.tion or organization.
(b)
Authorization and power. Such Subscriber has the requisite power and authority
to enter into and perform this Agreement and the other Transaction Documents (as hereinafter defined)
and to purchase the Notes, Purchased Shares and Warrants being sold to it hereunder. The execution,
delivery and performance of this Agreement and the other Transaction Docunlents by such Subscriber and
the consummation by it of the transactions contemplated hereby and thereby have been duly authorized
by all necessary corporate or partnership action,. and no further consent or authorization of such
Subscriber or its board of directors, stockholders, partners, members, as the case may be, is required.
This Agreement and the other Transaction Documents have been duly authorized, executed and delivered
by such Subscriber and constitutes, or shall constitute when executed and delivered, a valid and binding
obligation of such Subscriber enforceable against such Subscriber in accordance with the terms thereof
(c)
No Conflicts. The execution, delivery and performan.ce of this Agreeme))t and
the other Transaction Documents and the consummation by such Subscriber of the transactions
contemplated hereby and thereby or relating hereto do not and will not (i) result in a violation of such
Subscriber's charter documents or bylaws or other organizational documents or (ii) conflict with, Or
constitute a default (or an event which with n9tice or lapse of time or both would become a default)
under, or give to others any rights of termination, anlendment, acceleration or cancellation of any
agreement, indenture or instrument or obligation to which such Subscriber is II party or by which its
properties or assets are bound, or result in a violation of any law, rule, Of regulation, or [my order,
judgment or decree of any court or governmental age))cy applicable to such Subscriber or its properties
Such Subscriber is not required to obtain any consent, authorization or order of; or make any filing or
registration with, any COurt or governmental agency in order for it to execute, deliver or perform any of its
obligations under this Agreement and the other Transaction Documents or to purchase the Securities in
accordance with the terms hereof.
(d)
Information on Company. Such Subscriber has been furnished with or has had
access at the EDGAR Website of the Commission to the Company's Form 10-KSB for the year ended
June 30, 2009 as filed with the Commission, together with all subsequently filed Forms lO-QSB, Forms
8-K, and other reports and filings made with the Commission and made available at the EDGAR website
(hereinafter referred to collectively as the "Reports"). Such Subscriber bas had an opportunity to ask
questions and receive answers from representatives of the Company, and considered all factors such
Subscriber deems material in dec.iding on the advisability of investing in the Securities. The Subscriber
and its advisors, if any, have been afforded the opportunity to ask questions of the Company and to
receive answers thereto concerning the Company and the transactions contemplated herein. Subscriber
does not: acknowledge that any of such information is material non-public information.
(e)
Information on Subscriber. Concurrently herewith, Subscriber is delivering to
tile Company a completed and executed Subscriber Questionnaire, the form of which is attached hereto as
Exhibit D. Such Subscriber is, and will be at the time of the conversion of the Notes and exercise ofthe
Warrants, an "accredited investor", as such term is defined in Regulation D promulgated by the

Commission under the 1933 Act, is experienced in investments and business matters, has made
investments of a speculative nature and has purchased securities of United States publicly-owned
companies in private placements in the past and, with its representatives, has such knowledge and
experience in financial, tal\C and other business matters as to enable such Subscriber to utilize the
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infonnation made available by the COlupany to evaluate the mcrits and risks of and to make an informed
investment decision with respect to the proposed purchase, which represents a speculative investment.
Such Subscriber has the authority and is duly and legally qualified to purchase and own the Securities.
Such Subscriber is able to bear the risk of such investment for an indefinite period and to afford a
complete loss thereof. The information set forth in the Subscriber QuestiOimaire and on the signature
page hereto regarding such Subscriber is accurate.
(I)
Purchase ofN ote, Purchased Shares and Warrants. On the Closing Date, the
Subscriber will purchase the Note, Purchased Shares and Warrants as principal for its own ace-ount fOf
investment only and not with a view toward, or for resale in connection with, the public sale or any
distribution thereof.
(g)
Compliance with Securities Act. Such Subscriber understands and agrees that
the Securities have not been registered under the 1933 Act or any applicable state securities laws, by
reason oftheir issuance in a transaction that does not require registration under the 1933 Act (based in
part on the accuracy of the representations and warranties of such Subscriber contained herein), and that
such Securities must be held indefinitely unless a subsequent disposition is registered under the 1933 Act
01' any applicable state securities Laws or is exempt from such registrntion.
(hl
Communication of Offer. The offer to sell the Securities was directly
communicated to such Subscriber by the Company. At no time was such Subscriber presented with or
solicited by any leaflet, newspaper or magazine artic!.e, radio or television advertisement, or any other
form of general advertising or solicited or invited to attend a promotional meeting otherwise than in
connection and concun'endy with such communicated offer...
Restricted Securities. Slich Subscriber understands that the Securities have not
been registered under the 1933 Act and such Subscriber will not sell, offer to sell, assign, pledge,
hypothecate or otherwise transfer any of the Securities unless pursuant to an effective registration
statement under the 1933 Act, or unless an exemption from registration is available. Notwithstanding
anything to the contrary contained in this Agreement, such Subscriber may transfer (without restriction
and without the need for an opinion of counsel) the Securities to its Affiliates (as defined below) provided
that each such Affiliate is an "accredited investor" under Regulation D and such Affiliate agrees to be
bound by the tel1lls and conditions ofthis Agreement. For the purposes of this Agreement, an "Affiliate"
of any person or entity means any other person or cntity directly or indirectly controlling, controlled by or
under direct or indirect common control with such person or entity. Affiliate includes each Subsidiary of
the Company. For purposes of this definition, "control" means the power to direct the management and
policies of such person or fll"m, directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise.
(i)
OJ
No Governmental Review. Such Subscriber understands that no United States
federal Or state agency or any other governmental or state agency has passed on or made
recommendations or endorsement of the Securities or the suitability of the investm.ent in the Securities
nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(k)
CorrectneS2f Representations. Such Subscriber represents as to snoh
Subscriber that the foregoing representations and warranties are true and correct as of the date hereof and,
unless a Subscriber otherwise notifies the Company prior to the Closing Date shall be true and correct as
ofthe Closing Date.
(1)
Survival. The foregoing representations and warranties shall survive the Closing
Date.
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5.
C0lllJ!!\I)Y Representations and Warranties. The Company represents and warrants to and
agrees with each Subscriber tbat:
(a)
Due Incorporation. The Company and each of its Subsidiaries is a corporation or
other entity duly incorporated 0)" 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 and each of its Subsidiaries is duly
qualitled as a foreign corporation to do business and is in good standing in each jurisdiction where the
nature ofthe 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 (as defined
below) on the Company. For purposes of this Agreement, a "Material Adverse Effect" on the Company
shall mean a material adverse effect on the financial condition, results of operations, 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 25% 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,
OJ) in the case of a partnership 01" linlited 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 througb Olle or more intermediaries, by such
entity. AU the Company's Subsidiaries as ofthe Closing Date and the Company's ownership interest in
such Subsidiaries are set forth 0.0 Schedule 5(a) he("eto.
(b)
Outstanding Sto,'k. AU issued and ontstanding shares of capital stock of the
Company have been duly authorized and vali(!ly issued lind a("e fully paid and.nonassessable.
(e)
Authority; Enforceability. This Agreement, the Note, Purchased Shares, the
Warrants, Security Agreement, Subsidiary Guaranty, Agreement and the Escrow Agreement, and any
other agreements deJivered together with this Agreement or in connection herewith (collectively, the
"Transaction Docnments") have been dnly authorized, executed and delivered by tiN Company and/or
its Subsidiaries and a("e valid and binding agreements of the Company and its Subsidiaries enforceable
against them 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 .
Cd)
Additiopal Issuances. There are no outstanding agreements or preemptive or
similar rights affecting the Company's 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 its
Subsidiaries or other equity interest in the Company except as described in the public filings and
Schedule 5(d). The Common Stock ofthe Company on a fully diluted basis outstanding as of the last
Business D.ay preceding the Closing Date is set forth on Schednle 5(d).
(e)
Consents. No consent, approval, authorization or order of any court,
govemmental agency or body or arbitrator having jurisdiction over the Company, or any of its Affiliates,
the OTe Bulletin Board (the "Bulletin Board") nor the Company's shareholders is required for the
execution by the Company of the Transaction Documents and complian.ce and performance by the
Company of its obligations under the Transaction Documents, including, without limitation, the issWUlce
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and sale of the Securities. The Transaction Documents and the Company's perfon:nance of its obligations
thereunder has been unanimously approved by the Company's Board of Directors.
(f)
No Violation or Conflict. Assuming the representations and warranties of such
Subscribers in Se"tion 4 are true and correct and except as set forth on this Schedule 5(1), neither the
issuance and sale of the Securities nor the performance by the Company of its obligations under this
Agreement and all other Transaction Documents entered into by the Company relating thereto by the
Company will:
(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 or certificate of incorporation, charter 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, govenunental agency. or body, or arbitrator having jurisdiction
over !h.e Compauy or over the properties or assetsofthe Company or any of its Affiliates, (C) to the
Company's knowledge the tenus of any bond, debenture, note or any other evidence of indebtedness for
borrowed money, 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 CD) the tenus of any "lock-up" or similar
provision of any underwriting 01" similar agreement to which the Company, 01" any of its Affiliates is it
party except for any such the violation, conflict, breach, or default of which would not have a Material
Adverse Effect; or
(g)
The SeQyrjties. The Securities upon issuance, conversion and exercise:
(i)
are, or will be, free and clear of any security interests, liens, claims or
other encumbrances, granted by the company subject to restrictions upon transfer under the 1933 Act and
any applicable state securities laws;
have been, or will be, duly and validly authorized and on the date of
issuance ofthe Purchased Shares and Shares upon conversion ofthe Note and the Warrant Shares and
upon exercise ofthe Warrants, the Shares and Warrant Shares will be duly and validly issued, fully paid
and nonassessable and if registered pursuant to the 1933 A.ot and resold pursuant to an effecti.ve
registration statement will be free trading and unrestricted;
(il)
(iii)
will not haw been issued or sold in violation of any preemptive or other
similar rights of the holders of any securities ofthe Company;
(iv)
assuming the representations and w8lTanties of such Subscribers as set
forth in Section 4 hereof are true and c.orrect, will not result in a violation of Section 5 under the 1933
Act.
(h)
UHgation. There is no pending or, to the best knowledge ofthe Company,
threatened action, suit, proceeding or investigation before any court, govermnental agency or body, or
.
arbitrator havingjurlsdiction over the Company, or any of its Affiliates that would affect the execution by
the Company or the performance by the Company of its obligations under the Transaction Documents.
Except as disclosed in the Reports or in the schedules hereto, there is no pending or, to the best
knowledge ofthe Company, basis for or threatened action, suit, proceeding or investigation before any
court, governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its
Affiliates which litigation if adversely determined would have a Material Adverse Effect.
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(i)
Repolting Company. Except as set forth in Schedule 5(i) attached hereto, the
Company is a publicly-held company subject to repOlting obligations pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended ("1934 Act") and has a class of common stock registered
pursuant to Section 12(g) of the 1934 Act. Pursuantto the provisions of the 1934 Act, the Company has
timely filed all reports and other materials required to be filed thereunder with the Commission during the
preceding t\'Ielve months.
.
G)
Information Concerning COmpaIlY. The Reports contain all material information
relating to the Company and its operations and financial condition as oftheir respective dates which
information is required to be disclosed therein. The Reports including the financial statements therein
and do not contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein Of necessary to make the statements therein, taken as a whole, not misleading in light of the
circumstances when made.
(k)
Stop Tran.sfer. The Company has not and will not issue any stop transfer order or
other order impeding the sale, resale or delivery of any oftbe Secnrities, except as may reasonably be
believed by the Company required by any applicable federal or state securities laws or the rules and
regulations ofthe principal trading market oftbe Company's Common Stock and unless
contemporaneous notice of such instruction is given to the Subscribers.
(1)
Defaults. The Company is not in violatioll of its articles of incorporation or
bylaws. Except as sel froth on Schedule S(m) attached hereto, the Company is (i) not in default under or
in violation of any otber material agreement or, which default or violation would have a Material Adverse
Effect, (ii) not in default with respect to any order of aily court, arbitrator or governmental body or subject
to or party to any order of any court or governmental authority arising out of any action, snit or
proceeding under any statute or otber law respecting antitrnst, monopoly, restraint of trade, unfair
competition or similar matters, and (iii) not in violation of any statute, rule or regulation of any
govemmental authority which violation would have a Material Adverse Effect.
(m)
Not an Integrated Offering. Neither the Company, nor any, nor any person acting
on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any
offers to buy any security under circumstallces that would cause the offer ofthe Securities pursuaut to this
Agreement to be integrated with prior offerings by the Company for purposes of the 1933 Act or any
applicable stockholder approval provisions, including, without limitation, under the rules and regulations
of th.e Bulletin Board which would impair the exemptions reHed upon in this Offering or the Company's
ability to timely comply wjth its obligations hereunder.
(n)
No General Sglicitation. Neither the Company, nor any of its Affiliates, nor to
its knowledge, any person acting on its or tbeir behalf, has engaged ill any fonn of general solicitation or
general advertising (within the meaning of Regulation D under the 1933 Act) in connection with the offer
or sale ofthe Securities.
(0)
Listing. The Common Stock is quoted on the Bulletin Board under the symbol
MRIB.OB. The Company has not received any oral or written notice that the Common Stock is not
eligible nor will become ineligible for quotation on the Bulletin Board nor that the Common Stock does
not meet all requirements for the continuation of sneh quotation and the Company satisfies all the
requirements for the continued quotation ofthe Common Stock on the Bulletin Board ..
.(p)
Dilution. The Company's executive officers and directors understand the nature
ofthe Securities being sold hereby and recognize that the issuance ofthe Securities will have a potential
dilutive effect on the equity holdings of other holders of the Company's equity or rights to receive equity
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ofthe Company. The board ofdirectOl"s of the Company has concluded, in its good faith business
judgment that the issuance ofthe Securities is jn the best interests of the Company and its shareholders.
The Company specifically acknowledges that its obligation to issue the Purchased Shares, Shares upon
conversion of the Notes, and the Warrant Shares npon exercise ofthe W81Tants is binding upon the
Company and enforceable regardless of the dilution such jssuance may have <m the ownership interests of
otber stockholders of the Company or parties entitled to receive equity oHhe Company,
(q)
No Disagreements with Accountants and 1awyers. There ar" no disagreementsof
any kind presently, between the Company and the accountants and lawyers formerly or presently
employed by the Company, which are required to be disclosed under applicable securities laws.
(I")
PTC 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. The name, address, telephone number, fax number, contact person and email address oHhe
Company transfer agent is set forth on SchedUle 5(t) hereto.
Investment Company. Neither the Company nor any Affiliate is an "investment

company" within the meaning ofthe Investment Company Act of 1940, as amended.
(s)
(t)
Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the
Company, any agent Or other person acting on behalf o( the Company, has (i) 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 oflaw, or (iv) violated in any material respect any provision of
.
the Foreign Corrupt Practices Act of 1977, as amended.
(u)
Suhsidiary RepresentatiOI:)S. The Company makes each of the representations
contained in Sections 5(a), (b), (d), (t), (h), (k), (m), (q), (r), (s), (u), (w'), (x) and (y) of this Agreement, as
same relate to each Subsidiary ofthe Company.. The Company represents tbat it owns the equity oHhe
Subsidiaries and rights to receive equity of the Subsidiaries as set forth on Scbedule 5(a), free and clear
of all liens, encumbrances and claims, except as set forth on Schedule 5(d). No person or entity other
than the Company has the right to receive any equity interest in the Subsidiaries.
(y)
~urviva1.
The foregoing representations and wlUTanties shall survive the Closing
Date.
6.
Regulation D Offering/Legal Opinion. The offer and issuance of the Securities to the
Subscribers is being made pursuant to the exemption from the registration provisions of the 1933 Act
afforded by Section 4(2) or Section 4(6) of the 1933 Act andlor Rnle 506 of Regulation D promulgated
thereunder. On the Closing Date, the Company will provide an opinion reasonably acceptable to sllch
Subscribers from the Company's legal counsel in the fOI11l annexed hereto as Exhibit E opini!lg on the
availability of an exemption from registration under the 1933 Act as it relates to the offer and issuance of
the Securities, and the other matters set forth on Exhibit E.
7.1
Conversion ot'Notes.
(a)
Upon the conversion of a note or part thereof, the Company shall, at its own cost
and expense, take all necessary action, including obtaining and delivering, an opinion of counsel to assure
that the Company's transter agent shall issue stock certificateS" in the name of a Subscriber (or its
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P.008/020
permitted nominee) or such other persons as designated by such Subscriber and in such denominations to
be specified at conversion representing the number of shares of Common Stock issuable upon such
conversion. The Company warrants that no instructions other than these instructions have been or' will be
given to the transfer agent of the Company's COimnon Stock and that the certificates representing such
shares shall contain no legend other than a customary restrictive legend. If and when a Subscriber sells
the Shares, assuming (i) a registration statement including such Shares is effective and the prospectus, as
supplemented or amended, contained therein is current and (ii) such Subscriber or its agent confums in ,
writing to the transfer agent that such Subscriber has complied with the prospectus delivery requirements,
the Company will reissue the Shares without restrictive legend. In the event that the Shares are sold in a
manner that complies with an exemption from registration, the Company wi1\ promptly instruct its
counsel to issue to the transfer agent an opinion permitting removal of the legend (indefinitely, if pursuant
to Rule 144(b)(1)(i) of the 1933 Act, odor 90 days ifpursuantto other provisions ofRuJe 144 ofthe
1933 Act, provided Subscriber delivers a reasonably requested representation in support of such opinion
and such other documentation as may be requested by the Company's legal counsel.)(b) A Subscriber
, will give notice of its decision to exercise its right to convert the Note, interest or part thereof by
telecopying Or otherwise delivering a completed Notice of Conversion (a form of which is annexed as
Exhibit A to the Note) to the Company via confirmed telecopier transmission or otherwise pursuant to
Section 13(a) of this Agreement. Such Subscriber will not be required to surrender the Note until the
Note has been fully converted or satisfied. Each date on which a Noti,ce of Conversion is telecopied to
the Company in accordance with the provisions hereofby 6:00 PM Eastern Time (BT) (or if received by
the Company after 6:00 PM ET, then the next business day) shall be deemed a "Conversion Date", The
Company will itself or cause the Company's transfer agent to transmit the Company's Common Stock
certificates representing the Shares issuable upon conversion of the Note to such Subscriber via express
courier for receipt by such Subscriber within five(5) business days after receipt by the Company of the
Notice of Conversion (such third day being the "Delivery Date"). In the event the Shares are
electronically transferable, then delivery of the Shares must he made by electronic transfer provided
request for such electronic transfer has been made by such Subscriber. A Note representing the balance
of the Note not so converted will be provided by the Company to a Subscriber if requested by such
Subscriber, provided such Subscriber delivers the original Note to the Company. In the event that a
Subscriber elects not to surrender a Note for reissuance upon partial payment or conversion of a Note,
such Subscriber hereby indemnifies the Company against any and all loss or damage attributable to a
third-party daim in all. amount in excess of the actual amount then due under the Note.
(0)
The Company understands that a delay in the delivery of the Shares in the form
required pursuant to Section 7.1 hereof, or the Mandatory Redemption Amount described in Section 7.2
hereof, respectively later than the Delivery Date or the ]\.I!andatory Redemption Payment Date (as
hereinafter defined) could result in economic loss to a Subscriber. As compensation to a Subscriber for
such loss, the Company agrees to pay (as liquidated damages and not as a penalty) to such Subscriber for
late issuance of Shares in the form required pursuant to Section 7.1 hereof upon Conversion oHhe Note in
the amount of $100 per business day after the Delivery Date for each $10,000 of Note principal amount
(and proportionately for other amounts) being conveJ1ed of the corresponding Shares which are not timely
delivered. The Company shall pay any payments inoun'ed under this Section in immediately available
funds upon demand. Furthermore, in addition to any other remedies which may be available to such
Subscriber, in the event that the Company fails for any reason to effect delivery of the Shares within 7
business days after the Delivery Date or make payment withiu 7 business days after the Mandatory
Redemption Payment Date (as defined in Section 7.2 below), such Subscriber will be entitled to revoke
all or part of the relevant Notice of Conversion or rescind all or part of the notice of Mandatory
Redemption by delivery of a notice to such effect to the Company whereupon the Company and such
Subscriber shall each be restored to their respective positions immediately prior to the deUvery of such
notice, except that the liquidated damages described above shall be payable through the date notice of
revocation or rescission is given to the Company.
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(d)
The Company agrees and acknowledges that despite the pendency of a not yet
effective registration statement which includes for registration the Securities, the Subscriber is permitted
to and the Company will issue to the Subscriber Shares upon conversion of the Note and Warrant Shares
upon exercise of the Warrants. Such Shares will, if required by law, bear the legends described in Section
4 above and if the requirements of Rule 144 under the 1933 Act are satisfied be immediately resalable
thereunder.
7.2
MandatOly Redemption at Subscriber's Election. In the event (a) the Company is
prohibited from issuing Shares, (b) fails to timely deliver Shares on a Delivery Date, (e) upon the
occurrence of any other Event of Default () and if any event listed in subparagraph (al, (b) or (c) is not
cured during any applicable cure period and an additional twenty (20) days thereafter, then at such
Subscriber's election, the Company must pay to such Subscriber ten (10) business days after request by
such Subscrlber, at such Subscriber's election, a sum of money determined by (I) multiplying up to the
outstanding principal amount of the Note designated by such Subscriber by 110%, or (ii) llluitiplying the
number of Shares othenvise deliverable upon conversion of an amount of Note principal and/or interest
designated by such Subscriber (with the date of giving of such designation being a "Deemed Conversion
Date") by either the Conversion Price that would be in effect on the Deemed Conversion Date Or by the'
highest closing price of the Common Stock on the Principal Market for the period commencing on the
Deemed Conversion Date until the day prior to the receipt of the Mandatory Redemption Payment,
whichever is greater; together with accrued hut unpaid interest thereon and any other sums arising and
outstanding under the Transaction Documents ("Mandatory Redemption Payment"). The Mandatory
Redemption payment must be received by such Subscriber within ten (10) business days after request
("Mandatol'Y Redemption Payment Date"). Upon receipt of the Mandatory Redemption Payment, the
corresponding Note principal and interest will be deemed paid and no longer outstanding. "Change in
Control" shall mean (I) the Compauy no longer having a class of shares publiCly traded or listed on a
Principal Market (as hereinafter defined), (ii) the Company becoming a Subsidiary of another entity or
merging into or with another entity, (iii) a majority of the board of directors of the Company as of the
Closing Date no longer serving as directors of the Company, except due to natural causes, or (iv) the sale,
lease, license or transfer of substantially all the assets of the Company and its Subsidil;l.ries.
7.3
Injunction. In the event the Subscriber shall elect to convert a Note or paIt thereof, the
Company may not refuse conversion or exercise. based on any c1ainl that such Subscriber or anyone
associated or affiliated with such Subscriber has been engaged in any violation oflaw, or for any other
reason, unless, an injunction from a court, on notice, restraining and or enjoining conversion of all or part
of such Note shall have been sought and obtained by the Company or at the Company's request or with
the Company's assistance
7.4
Buy-In. In addition to any other rights available to a Subscriber, ifthe Company fails to
deliver to such Subscriber such shares issuable upon conversion of a Note by the DeUvery Date and jf
after seven (7) business days after the Delivery Date such Subscriber or a broker on such Subscriber's
behalf, purchases (in an open market transactioll or otherwise) shares of Comrtlon Stock to deliver in
satisfactiOll of a sale by such Subscriber of the Common Stock which such Subscriber was entitled to
receive upon such conversion (a "Buy-In"), then the Company shall pay in cash to such Subscriber (in
addition to any remedies available to or elected by such Subscriber) the amount by which (A) such
Subscriber's total purchase price (including brokerage commissions, if any) fix the shares of Common
Stock so pnrchased exceeds (B) the aggregate principal and/or interest amount ofthe Note for which such
conversion was not timely honored, together with interest thereon at a rate of 3% per annum, accruing
until such amount and any thereon is paid in full (which amoullt shall be paid as liquidated damages and
not as a penalty). For example, jf such Subscriber purchases shares of Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of $300 of note
principal andlor interest, the Company shall be required to pay to such Subscriber, plus int<;lrest. The
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Subscriber shall provide the Company written notice indicating the amounts payable to such Subscriber in
respect of the Buy-ln.
7.5
Adjustments. The Conversion Price, Warrant exercise price and the number of Shares
issuable upon conversion ofthe Notes and Warrant Shares issuable upon exercise oftlle Warrants shall be
equitabJy adjusted and as otherwise described in this Agreement, the Notes and Warrants.
7.6
Redemption. The Note shall be redeemed with the first draw downs of the Equity Line
established pursuant to the Stock Purchase Agreement, if the Company uses the Equity Line.
8.
Finder/Legal pees.
(a)
Finder. Except as set forth on Schedule Sea) attached hereto, the Company on the
one hand, and each Subscriber (for himself, herself or itself only) on the other hand, agrees to indenmiry
the other against and hold the other harmless from any and all liabilities to any persons claiming
brokerage commissions or finder's fees on account of services purported to have been rendered on behalf
of the indemnifYing party in connection with this Agreement or the transactions contemplated hereby and
arising out of such party's actions. The Company and each Subscriber represents that there are no parties
entitled to receive fees, commissions, or similar payments in connection with the Offering (as such term is
defined below) arising out of such party's actions.
(b)
Legal Fees. The Company shall payout of escrow a cash fee of$25,OOO which
will include aU legal fees associated with both transactions. The fltst $10,000 will come out of escrow
from the Bridge Loan funds pursuant to the Note. The remailling $15,000 will COllie out of the first
tranche of the Stock Purchase Agreement.
9.
Covenants of the Company. The Company covenants and agr'ees with the Subscribers as
follows:
(a)
Stop Orders. The Company will advise the Subscribers, within twenty-four
hours after it receives notice ofissuance by the Commission, any state securities commission 01" any other
regulatory authority of any stop order or of any order prevellting or suspending any offering of any
securities of the Company, or ofthe suspension of the qualification of the Common Stock of the
Company for offering or sale in any judsdiction, or the initiation of any proceeding for allY such purpose.
(b)
Listing/Quotation. The Company shall promptly secure the quotation or listing
of the Purchased Shares, Shares and Warrant Shares upon the Principal Market 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 any Warrants are outstanding.
The Company will maintain the quotation or listing of its Common Stock on tile American Stock
Exchange, Nasdaq Capital Market, Nasdaq Global Select Market, Nasdaq Global ]l,!Iarket, the Bulletin
Board, 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. As of the date of this Agreement and the Closing Date, the Bulletin Board is and
will be the Principal Market.
(c)
M.arket RegqJatiolls. The Company shallnotiry the Commission, the Principal
Market and applicable state authorities, in accordance with their requiremellts, of the transactions
contemplated by this Agreement, and shall take all other necessary action and proceedings as lIlay
10
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P. 01 1/020
berequired aud permitted by applicable law, rule aud regulation, for the legal and valid issuance of the
Securities to the Subscribers and promptly provide oopies thereof to the Suhscrib",rs.
(d)
Filing Requirements. From the date of this Agreement and until after the earlier
to occur of eighteen (8) months from the Closing Date, (ii) until all the Shares have been resold or
transferred by all the Subscribers pursuant to a registration statement or pursuant to Rule 144(b)(1 )0), or
(iii) the Notes are no longer outstanding (the date of such latest occurrence being the "End Datin, the
Company will (Al cause its Common Stock to continue to be registered under Section 12(b) or 12(g) of
the 1934 Act, CB) comply in all respects with its reporting and filing obligations under the 1934 Act, (C)
voluutarilycomply with all reporting requirements that are applicable to an issuer with a class of shares
registered pursuant to Section 12(g) of the '1934 Act, iithe Company is not subject to such repOlting
requirements, and (D) comply with all requirements related to any registration statement filed pursuant to
this Agreement. Until the End Date, the Company will continue the listing or quotation of the Common
Stock on a Principal Market and will comply in a.llrespects with the Company's repol"ting, filing and
other obligations nnder the bylaws or rules of the Principal Market. The Company agrees to timely file a
Form D with respect to the Securities if required under Regulation D and to provide a copy thereof to
each Subscriber promptly after such filing.
Use of Proceeds. The proceeds of the Offering must be employed by the
(e)
Company for general corporate purposes and working capitai.
Reservation. Prior to the 'Closiug, the Company undertakes to reserve, authorized
(f)
but uni.ssued Common Stock, a number of common shares equal to 300% ofthe amount of Common
Stock necessary to allow the holder of the Note to be able to convert all such outstanding Notes aud
reserve the amount of Warrant Shares issuable upon exercise of the Wanauts. Failure to have sufficient
shares reserved pursuant to this Section 9(f) at any time shall be a material default of the Company's'
. obligations under this Agreement and an Event of Default under the Note.
Taxes. From the date of this Agreement and until the End Date, the Company
(g)
will promptly pay and discharge, or cause to be paid aud discharged, when due and payable, aU lawful
taxes, assessments and govemmental charges or leYies imposed upon the income, profits, property 01'
business ofthe Company; provided, however, that any such tax, assessment, charge or levy need not he
paid if the validity thereof shall be contested in good faith by appropriate proceedings and the Company ..
(h)
Insuran.ce. From the date ohhis Agreement aud until tile End Date, the
Company will keep its assets which are of an insurable c.haracter insured by financially souud 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, a co-insurer and not in auy event less than one hundred
percent (100%) of the insurable value orthe 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 alld in the mallner customary for companies in
similar businesses similarly situate.d and to the extent available on commercially reasonable terms.
(1)
B90ks and Records. From the date of this Agreement and until the End Date, the
Company will keep records and books of account in which entries will be made of all dealings or
trausactions in relation to its business and affairs in accordance with generally accepted accounting
principles.
G)
Q.QyroJmental Authorjties. 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
11
FEB-20-2014
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P.012/020
governmental authorities relating to the conduct of its business or to its properties or assets. ;the ["ilw;e'td
'. '. .. -.- .- ..
do~owi.I!~qt!J1!V:~.M~tetilll Ad,!ers~~ff~~!;.
(k)
ConfidentialitylPublic Announcement. From the date of this Agreement and
until the End Date, the Company agrees that eJ>cept in coonection with a Fonn 8K and the registration
statement or statements regarding the Subscribers' securities or in correspondence with the SEC regarding
same.
Negative Covenants. So long as a Note is outstanding, without the consent of the
Subscribers, the Company will not and will not permit any of its Subsidiaries to directly or indirectly:
(1)
(i)
Intentiollally Omitted
(n
repay, repurchase or offer to repay, repurchase or otherwise acquire or
make allY dividend or distribution in respect of any of its Common Stock, preferred stock, or other equity
securities other than to the extent permitted or required under the Transaction Documents;
OJ)
engage in any transactions with any officer, director, employee or any
Affiliate (excluding a Subsidiary) of the Company, including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer, director or such employee or,
to the knowledge of the Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner, in each case in eJ>cess of $1 00,000 other
than 0) for .payment of salary and bonuses or consulting fees for services rendered, (ii) reimbursement for
. expenses incurred on behalf of the Company, (iii) for other employee benefits, including stock option
agreements under any stock option plan of the Company, and (iv) pursuant to eJ>isting contractual
agreements.
.
Intervening sections intentionally omitted(m) Seniority. Except for Pennitted Liens
and as otherwise provjded for herein, until the Notes are fully satisfied or converted, the Company shall .
not grant nor allow any security interest to be taken in the assets of the Company or any Subsidiary; in or
to such assets,
(n)
DTC Program. At all times that Notes or Warrants are outstanding, the Company
will employ as tlle transfer agent for the Common Stock, Shares and Warrant Shares a participant ill the
Depository Trust Company Automated SeCLlrities Transfer Program.
10.
Covenants of the Company and Subscriber Regarding Indemnification.
(a)
Intentionally Omitted.
ILL Piggyback Regisya!iw Rights. The Company hereby grants the following registration
rights to holders of the Securities. If the Company at any time proposes to register any of its securities
under the 1933 Act for sale to the public, whether for its own account or for the account of other security
holders or botb, except with respect to registration statements 011 Fonus S-4, 8-8 or another form not
available for registering the Purchased Shares and Warrant Sb,"lres (collectively, the "Registrable
Securities") for sale to the public, provided the Registrable Securities are not otherwise registered for
resale by the Subscribers or Holder pursuant to an effuctive registration statement, each such time it will
give at least fifteen (15) days' prior wri.tten notice t(> the reoord holder of the Registrable Securities of its
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intention so to do. Upon the written request of the holder, received by the Company within ten (10) days
. after the giving of any such notice by tbe Company, to register any of the Registrable Securities not
previously registered, the Company will cause such Registrable Securities as to which registration shall
have been so requested to be included with the securities to be covered by the registration statement
proposed to be filed by the Company, all to the extent required to peoni! the sale or other disposition of
the Registrable Securities so registered by tbe holder of such Registrable Securities (the "Seller" or
"Sellers"), except to the extent in an underwritten public o:ffering, the underwritten cuts back the number
of Registrable SeclU"ities proposed by the Subscriber. The Sener is hereby given the same rights and
benefits as any other party identified in such registration. In the event that any registration pursuant to
this Section 11.1 shall be, in whole or in part, an underwritten public offering of common stock of the
Compal)y, the number of shares of Registrable Securities to be included in such an underwriting may be.
reduced by the managing underwriter jf and to the extent that the Company and the underwriter shall
reasonably be of the opinion that such inclusion would adversely affect the marketing of the securities to
be sold by the Company thereh(Notwithstandingthe foregoing provisions, or Section llA hereot~ the
Company may withdraw or delay or suffer a delay of any registration statement ref<:lrred to in this Section
11.1 without thereby incurring any liability to the Seller due to such withdrawal or deJay.
J 1.2. Registration Procedures. If and whenever the Company is required by the provisions of
. Section 1U to effect the registration of any Registrable Securities under the 1933 Act, the Company will,
as expeditiously as possible:
(a)
subject to the timelines provided in this Agreement, prepare and file with the
Commission a registration statement required by Section II, with respect to the Registrable Securities and .
\1se its best efforts to cause such registration statement to become and remain effective for the period of
the distribution contemplated thereby (determined as herein provided), and promptly provide to the
holders of the Registrable Securities (i) notice that the Commission has no comments or no further
comments on the Registration Statement, and (ii) the declaration of effectiveness of the registration
statement;
.
(b)
furnish to the Sellers, at the Sellers expense, sucb number of copies of the
registration statement and the prospectus included therei!) (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the pubHc sale or their disposition ofthe securities
covered by such registration statement;
(e)
Ilse its best efforts to register or qualify the Registrable Se.curities covered by
such registration statement under the securities or "blue sky" laws of such jurisdictions as the Sellers shall
request in writing, provided, however, that the Company shall not for any such purpose be required to
qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so
qualified or to consent to general service of process in any sucb jurisdiction or to subject itself to taxation
any such jurisdiction;
.
in
(d)
if applicable, list the Registrable Securities covered by such registration
statement with any securities exchange on which the Common Stock of the Company is then
listed;
(e)
immediately notify the Sellers when a prospectus relating thereto is required to
be delivered under the 1933 Act, ofthe happening of any event of which the Company has knowledge as
a result of which the prospectus contained in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the circUll1stances then existing; and
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11.3. 'provision of Documents. In connection with each registration described in this Section
11, each Seller will furnish to the Company in writing such infonnation and representation letters with
respect to itself and the proposed distribution by it as reasonably shall be necessary in order to assure
compliance with federal and applicable state securities laws.
11.4. Intentionally omitted
11.5. Expenses. AIJ expenses incurred by the Company in complying with Section 11, .
including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses (including reasonable
counsel fees) incurred in connection with complying with state securities or "blue sky" laws, fees ofthe
National Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents and registrars, costs
of insurance and tee of one counsel for the Seller are caned "Registration Expenses." The Company will
pay all Registration E.xpenses in cOIUlection with the registration statement under Section 11. Selling
Expenses in connecti.on with each registration statement under Section 11 shall be borne by the Seller.
The exception to this is the $25,000 fee,( $10,000 of which will be paid out of escrow of this Bridge
Loan and the remainder out of the firsttranche of the Equity Line, if utilized), and will cover all ofthe
Subscriber's costs for the note and equity line.
11.6.
Indemnification and ContributiQn directly
(a)
In the event of a registration of any of the Registrable Securities under the 1933
Act pursuant to Section 11, the Seller severally but not jointly will, to the extent pennilted by law,
indemnifY and hold hannless the Company, and each person, if any, who controls the Company within
the meaning of the 1933 Act, each officer of the Company who signs the registration statement, each
director of the Company, each underwriter and each person who oontrols any underwriter within the
meaning of the 1933 Act, against all losses, claims, damages or liabilities,joint or several, to which the
Company or such officer, director, underwriter or controlllng person may become subject under the 1933
Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereo:!) arise
out of or are based upon any untrue statement or alleged untrue statement of any material fact contained.
in the registration statement under which such Registrable Securities were registered under the 1933 Act
pursuant to Section 11, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out ofor are based upon the omission or alleged omission to
state therein a material fact required to be stated therein Or neoessary to make tlle statements therein I,ot
misleading, and will reimburse the Company and each such officer, director, underwriter and controlling
person for any legal or other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability Qr action, provided, however, that the Seller will be'
. liable hereunder in any such case if and only to the extent that any such loss, claim, damage or liability
adses out of or is based upon an untrue statement or alleged untme statement or omission or alleged
omission made in reliance upon and in conformity with infonnation pertaining to such Seller, as such,
fumished ill writing to the Company by such Seller specit1cally for use in such registration statement,
(b)
Promptly after receipt by an indemnified party hereunder of riotice of the
commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifYing party hereunder, notify the indemnifYing party in writing thereof,but the
omission so to notifY the indemnifYing party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 11.6(c) and shall only relieve it from any liability
which it may have to such indemnified party under this Section 11.6(c), except and only if and to the
14
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P.015/020
extent the indemnifYing party is prejudiced by such omission. In case any such action shall be brought
against any indemnified party and it shall notifY the indemnifYing party of the commencell)ent thereof, the
indemnifYing party shall be entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel reasonably satisfactory to such indemnified party, and, after
notice from the indemnifYing Paliy to sneh indemnified party of its election so to assume and unde,take
the defense thereof, the indemnifYing party shall not be liable to such indemnified party under this
Section 11.6(c) for any legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof otber than reasonable costs.
(c)
In order to provide for just and equitable contribution in the event of joint
liability under the 1933 Act in any case in which either (i) a Seller, or any controlling person of a Seller,
makes a claim for indemnification pursuant to this Section 11.6 but it is judicially determined (by the
entry of a final judgment or decree by a court of competent jurisdiction and the expir/ition of time to
appeal or the denial of the last right of appeal) that such indemnitlcation may not be enforced in such case
notwitbstanding the fact that this Section 11.6 provides for indemnification in such case, or (ii)
contribution under the 1933 Act may be required on the part of the Seller or conUolJing person oftha
Seller in circumstances for which indemnification is under this Section 11.6; provided, however, that, in
any such case, (y) the Seller will not be required to contribute any amount in excess ofthe public offering
price of aU such securities sold by it pursuant to such registration statement; and (z) no person or entity
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) will be
entjtkd to contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.
11.7.
Delivery ofUp)egended Shares.
(a)
Within three (3) business days (suoh third business day being the "Unlegended .
Shares Delivery Date") after the business day on whioh the Company has received (1) a notice that
Purchased Shares or Warrant Shares have been sold pursuant to a registration statement or Rule! 44 under
the 1933 Act, (li) a representation that the prospectus delivery requirements, or the requirements of Rule
144, as applicable and ifrequired, have been satisfied, and (iii) the original share certificates representing
the shares of Common Stock that have been sold, and (iv) in the case of sales under Rule 144, customary
representation letters of the Subscriber and/or Subscriber's broker regarding compliance with the
requirements of Rule )44, the Company at the expense of the applicable holder, (y) shall deliver, and
shan cause .legal counsel selected by the Compauy to deliver to its trallsfer agent (with copies to
Subscriber) an appropriate instruction and opinion of such counsel, directing the delivery of shares of
Common Stock without any legends including the legend set fOrth in Section 4 above, (the "Unlegended
Shares"); and (z) cause the transmission oftbe certificates representing the Unlegended Shares together
with a legended certificate representing the balance of the submitted Purchased Shares or WruTantShares
certificate, if any, to the Subscriber at the address specified in the notice of sale, via express courier, by
electronic transfer or otherwise on or before the Unlegended Shares Delivery Date.
(b)
In lieu of delivering physical certificates representing tlle Unlegended Shares, if
the Company's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated
Secwities Transfer program, upon request of the Subscriber, so long as the certificates therefore do not
bear a legend and the Subscriber is not obligated to retun) such certificate for the placement of a legend
thereon, the Company must cause its transfer agent to electronically transmit the Unlegended Shares by
crediting the account of Subscriber's prime Broker with DTC through its Deposit Withdrawal Agent
Commission system. Such delivery must be made on or before the Unlegended Shares Delivery Date.
(c)
The Company understands that a delay in the delivery ofthe Unlegended Shares
pursuant to Section 11 hereof after the Unlegended Shares Delivery Date could result in economic loss to
15
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P.016/020
Subscriber. As compensation to Subscriber for such loss. If during any 360 day period, the Company
fails to deliver Unlegended Shares as required by this Section 11.7 for an aggregate of thirty (30) days,
then each Subscriber or a8signee holding Securities subject to such default may, at its option, require the
Company to redeem all or any pOition oHhe Purchased Shares or Ww"I"ant Shares subject to such default
at a price per share equal to 110% of the Purcha8,,'Pi"ice of such Purchased Shw'es or Warrant Shares
("Unlegended Redemption Amount").
(d)
In addition to any other rights available to a Subscriber, if the Company fails to
deliver to a Subscriber Unlegended Sh8J'es as required pursuant to this Agreement, within seven (7)
, business days after the Unlegended Shares Delivery Date and the Subscriber or a broker on the
Subscriber's behalt~ purchases (in an open market transaction or otherwise) shares of conunon stock to
deliver in satisfaction of a sale by such Subscriber of the shares of Common Stock which the Subscriber
was entitled to receive from the Company (a "Buy-In"), then the Company shan pay in cash to the
Subscriber (in addition to any remedies available to or elected by the Subscriber) the a:mount by which
(A) dIe Subscriber's total purcha8e price (including brokerage commissions, if any) for the shares of
common stock so purchased ex.ceeds (B) the aggregate purchase price of the shares of Common Stock
delivered to the Company for reissuance as Unlegended. For example, if a Subscriber purchases shares of
Common Stock having a total purchase price of$1 1,000 to cover a Buy-In with respect to $10,000 of
Purchase Price of shares of Common Stock delivered to the Company for reissuance as Unlegended
Shares, the Company shaH be required to pay the Subscriber $1,000. The Subscriber shall provide the
Company written IIOtice indicating the a:mOWlts payable to dIe Subscriber in respect of the Buy-In.
(e)
Maximum.Ex.ercise of Rights. In the event the ex.ercise of the rights described in
Sections 12(a) or 12(b) would or could result in the issuance of an a:mount of Common Stock of the
Company that would exceed the maximum a:mount that may be issued to a Subscriber calculated in the
manner described in SectiOIl 7.3 of this Agreement, then the issuauce of slIch additiollal sh8J'es of
Common Stock of the Company to such Subscriber will be deferred in whole or in part until such time as
such Subscriber is able to beneficially own such Common Stock without exceeding the applicable'
max.ilnum amount set forth calculated in the manner described in Section 7.3 of this AgreemlSnt. The
determination of when such Common Stock may be issued shall be made by each Subsoriber as to only
such Subscriber.
13,
14.
Miscellaneous.
(a)
Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writtng 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 overnight courier service with charges prepaid, or
(iv) transmitted by hand deUvery, telegra:m, or facsimile, addressed a8 set fOlth 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 heretUlder shall be deemed effective (a) upon harld
delivery or delivery by facsimile, with accurate cOllfinnation generated by the trausmitting facsimile
machine, at the address or number designated below (if delivered on a business day during normal
business hours where such I)otice is to be received), or the flrst business day following such delivery (if
delivered other than on a business day during nonnal bnsiness hours where such notice is to be received),
(b) on the first business day following the date deposited with an overnight courier service with charges
prepaid, or (c) on the third business day following the date of mailing pursuant to subpart (a)(ii) above, or '
16
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310 3942825
P.017/020
upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications
shall be provided to each Party at closing.
(b)
Entire Agreement: Assignment. This 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 both parties. Neither the
Company nor the Subscriber have relied on any representations not contained .or referred to in this
Agreement and the documents delivered here-with. No right or obligation of the Company shall be
assigned without pdor notice to and the written consent of the Suhscribers. The Suhscriber shall promptly
provide the Company with written notice of the assignment or delegation of any of its rights or
obligations under this Agreement.
(0)
CouptemartslExecution. This Agreement may be executed in any number of
counterparts and by tile 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 Agreement may be executed by facsimile signature and delivered hy facsimile
transmission.
Law Governing this Agreement. This Agreement shall be governed by and

(d)
construed ill accordance with the laws of the State of New York and New York County without regard to
conflicts of laws"principJes that would result in the application ofthe substantive laws of another
jurisdiction. Any action brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the civil or state courts of New York or in the
. federal courts located in the State of New York. The parties and the individuals executing this
Agreement all.d other agreements referred to hereiu or delivered in connection herewith on behalf
of the Company agree to submit to the jurisdiction of such courts and W'IIive trial by jury. The
pr~vailing party shall be entitled to reCover fi-om the other party its reasonable attorney's fees and costs.
In the event that any provision ofthis Agreement or any other agreement delivered in connection herewith
is invalid or unenforceable under any applicable statute or rule onaw, 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)
Captions: Certain Definitions. The captions of the various sections and
paragraphs of this Agreement have been inserted only fOI" the purposes of convenience; such captions are
not a part of this Agreement and shall not be deemed in any tllaOner to modify, explain, enlarge or restrict
any of the provisioos of this Agreement. As used in this Agreement the term "Jlll!l!Q!l" shaH mean and
include an individual, a partnership, a joint venture, II corporation, a limited liability company, a trust, an
unincorporated organization and a government or any department or agency thereof.
(f)
Calendar Days. All references to "days" in the Transaction Documents (as
hereinafter defined) shall mean calendar days unless otherwise stated. The terms "business days" aod
"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.
Severability. In the event that any term or provision of this Agreement shall be
(g)
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 orotherwjse afiect the
17
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:310 :3942825
P.018/020
validity, legality or enforceability: (i) by or beore that authority of the remaining terms and provisions of
this Agreement, which sball be enforced as ifthe unenforceable term or provision were deleted, or (ii) by
or before any other authority of any of the terms and provisions of this Agreement.
18
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P.019/020
310 3942825
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (A)
Please acknowledge your acceptance'ofthe foregoing Subscription Agreement by signing and

returning a ,coPy to the undersigned whereupon it shall become a binding agreement between us.
Marani Brands, Inc.

By:
&ct;d
Name:
rgrit E)Taud
Dated: February 1, 2010
SUBSCRIBER
Name of Subscriber:
PURCHASE
PRICE AND
PRINCll'AL
AMOUNT OF
NOTE
PURCHASED
SHARES
CLASS A
WARRANTS
CLASSB
WARRANTS
Address:
Fax No.:
Taxpayer ID# (if applicable):
(Si:
By:
19
P.02U/U~U
310 3942825
MARAN
SPIRITS
RECEIVED 02/04/2010
15:43
9195034478
Case
8:14-cv-00308-JLS-AN
03/03/14
ID #:39
~2/e4/2010 15:25
9185034478 Document 1 Filed
MARAN
SPIRITS Page 39 of 56 Page
PME 0.2105
FEB-20-2014
09:32
SIGNATURE PAGE TO !WBSCR!PTION AGWMENT (A)
Please aeknowledge your acceptance\" tJfthe fllregoing Subscription Agreement by !i!j;llWg and
n;llulling a copy to the unden;igned whereupon it .ball become I!. bioding 8gtlIfIalent between us.
Maran! Brands, Illc.
ny: ~
Name:
i!rIt ~d
Title: Cbief.llii:.ecutive ot'IICIIr
DaIliId, /i"ebruaty 1, 2010
WAlmAN1'S
CLASBB
WAlUlANTS
<(rS-I/O, o. ~
Ptll.l.CBASE
l'URClI.IW:D CLASS A
Pl,UCEAND
i5l1ARl!iS
PRINCIPAL
AMOlll'IT QIi'
NOtE
SUBSCRIBER
Name of Subsol'iber:
B()~\ t
1:."I/t\\t1)tfl\
Add,..,.~
__ 'd-.'S~ \l (l
o C>I\-c
Pax No.:
~t;\'{t.
('~'\
1\I{)O ()'Il ()
Gr~t\:nf .
k\!
w\,
"d-'i(; '9;q -
R~ !t \
p~
~1~~lilOO
fr
~
;9(;1
if, 6f)D,0 {lO
'1n. 37
Cj\ 1{)
_~H""J')'
(Si$1Jattlll,l
By:
'Sc,,~ ~Qk\\..('\ ~~ ,\.,.~
19
TOTAL P.020
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY TIDS

CERTIFICATE NOR THE SECURITIES INTO WHICR THESE SECURITIES ARE
EXERCISABLE RAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENllF.D .. OR APPUCABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFJ);RR.ED OR ASSIGNElf (IT IN"flIE"Am>l1"NCin.ll!
(A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED/OR (B) AN OPINION OF COUNSEL (WIDCR
COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (1I) UNLESS
SOLD PURSUANT TO RULE 144 OR ROCE 144A UNDER SAID ACT. NOTWITRSTANJ)ING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.
FORM OF COMMON STOCK PURCRASE WARRANT
Issue Date: February 4,2010
Marani' Brands, Inc., a corporation organized under the laws of the State of Nevada (the
"Company"), hereby certifies that, for value received, the Bodie Investment Group, Inc., or its assigns
(the "Holder"), is entitled, subject to the terms set forth below, to purchase from the Company at any time'
after the Issue Date until 5:00 p.m., B.S.T ort the fifth anniversary of the Issue Date (the "Expiration
Date"), up to 4,000,000 fully paid and nO(Ul$sessable'shares of Common Stock at a per share purchase
price of $0.001. The aforedescdbed purohase price per share, as adjusted from time to time as herein
provided, is referred to herein as the "Purchase Price." The number and character of such shares of
Common Stock and the Purchase Price are subject to adjustment as provided herein. The Company may
reduce the Purchase Price for some or all ofthe Warraots, temporarily or permanently. Capitalized terms
used and not otherwise defined herein shall have the meanings set forth in that certain Subscription
Agreement (the "Subscription Agreement"), dated as of February 4, 2010, and entered into by the
Company and the Holder.
.
As used herein th'" following tenns, unless the context otherwise requires, have the following
respective meanings:
(a)
The term "Company" shall include Marani Brands, Inc. and any corporation which shall
succeed or assume the obligations ofJ\wani Brands,Inc. hereunder.
(b)
The term "Common Stock" includes (a) the Company's COmll)Ol1 Stock, $0.001 par value
per share, as authorized on the date ofthe SUbscdption Agreement, and (b) any other securities into which
or for which any of the securities described in (a) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.
(c)
The term "Other Securities" refers to any stock (other than Common Stock) and other
securities oflhe Company or any other person (corporate or otherwise) which the hokjer of the Warrant at
any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in.
addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange
for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise.
(d)
Warrant.
l.
(Warrant)
31212010,10:06 AM
The teml "Warrant Shanes" shall mean the Common Stock issuable upon exercise ofthis
Exercise of Wanant.

1.1.
Number of Shares Issuable upon Exercise. From and after the Issue Date through
and including the Expiration Date, the Holder hereof shall be entitled to receive, upon exercise of this
Warrant in whole in accordance with the tennsof subsection 1.2, or upon exercise oftbis Warrant in part
. in accordance with subsection 1.3, sbares of Common Stock of the Company, subject to adjustment
pursuant to Section 4.
J .2.
Full Exercise. This Warrant may be exercised in full by the Holder hereof by
delivery of an original or facsimile copy of the torm of SUbscription attached as Exhibit A hereto (the
"Subscription Fonn") duly executed by such Hoiderand delivery within tWo days thereafter of payment, .
in cash, wire transfer or by certified or offidal bank check payable to the order of the Company, in the
amount obtained by mUltiplying the number of shares of Common Stock for which this Warrant is then
exercisable by the Purchase Prioo then in effect. The original Warrant is not required to be surrendered to
tile Company until it has been fully exercised.
i.3.
Partial Exercise. TIlis Warrall! may be exercised in part (but not for a fractiOllal
share) by delivery of a Subscription Form in the mann.er and at the place provided in subsection 1.2
except that the amount payable by the Holder on stICh partial exercise shall be the amount obtained by
mUltiplying (a) the number of whole sha!:es of Common Stock designated by the Holder in the
Subscription FOim by (b) the Purchase Price then in effect. On any such plutial exercise provided the
Holder has sun-endered the original Warrant, the Company, at its expense, will forthwith issue and deliver
to or upon the order of the Holder hereof a new Warrant of like tenor, in the name of the Holder hereof or
as such Holder (upon payment by such Holder of any applicable transfer taxes) may request, the whole
number of shares of Common Slock for which ~uch Warrant may stiJ) be exercised.
1.4.
Fair Market Value. Fair Market Value of a share of Common Stock as of a
particular date (the "Detennination Date'') shallmearl:
(a) . 1 the Determination Date is the date of a liquidation, dissolution or
winding up, or any event deemed to be a liquidation, dissolution or winding up pursuant to the
Company's charter, then aU amounts to be payable per share to holders ofthe Common Stock pursuant to
the charter in the event of such liquidation, dissolution or winding up, plus all other anlOunts to be
payable per share in respect of the Common Stock in liquidation under the c.harter, assuming for the
purposes of this dause (al that all of the shares ofCommoQ- Stock then issuable upon exercise of all of the
Warrants are outstanding at the Determination Date.
(b)
If the Company's Common Stock is traded On an exchange or is quoted
on the NASDAQ Global Market, Nasdaq Global Select Market, the NASDAQ Capital Market, the New
York Stock Exchange or the American Stock Exchange, LLC, then the closing; or last sale price,
respectively, reported for the last business day immediately preceding the Detem1ination Date;
If the Company's Common Stock is not traded on an exchange or on the
(e)
NASDAQ Global Market, the NASDAQ Capit.:11 Market or the Arne.dean Stock Exchange, Inc., but is
traded in the over-the-counter market, then the average of the closing bid and ask prices reported for the .
Jast business day immediately preceding the Determination Date;
(d)
Except as provided in claus", (d) below, if the Company's Common

tID thQ WoldAor Illld th.. Comp~m' OITJ"f'p
D'""I< j. ""~ I'ublid~' \l'<I.dod, thon
1.5.
Companv AcknQwledgment. The Company will, at the time of tbe exercise of
the Warrant, upon the request of the Holder hereof acknowledge in writing its continuing obligation to
afford to such Holder any rights to which sucb Holder shall continue to be entitled after such exercise in
accordance with the provisions of this Warrant. If the Holder shall fail to make any such request, such
failure shalt not affect the continuing obligation of the Company to afford to such Holder any such rights.
(Warrant)
31212010,10:06 AM

1.6.
Trustee for Warrant Holders. In the event that II bank or trust company shaH
have been appointed as trustee for the Holder of the Warrants pW'suant to Subsection 3.2, such bank or
trust company shall have all the powers and duties of a warrant agent (as hereinafter desc.dbed) and shall
accept, in its OWn. name for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the case may be, all exercise
of this Warrant pursuant to this Section 1.
.
..
1.7
Delivery of Stock Certificates. etc. on Exercise. The Company agrees that the
shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the
Holder hereof as the record owner of such shares as of the close of business on the date on which delivery
of a Subscription Form shall have occurred and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this WwTant in fullor in part, and in any event within three (3) business
days thereafter ("Warrant Share Delivery Date"), the Company at its expense (including the payment by it
of any applicable issue taxes) will cause to be issued in the n8llle of and delivered to the Holder hereof, or
as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance
with applicable securities laws, a certificate or certificates for the number of duly and validly issued, fully
paid and non-assessable shares of Common Stock (or Other SecW'ities) to which such Holder shall be
entitled on such exercise, plus, in lieu of any fi:actional share to which such Holder would otherwise be .
entitled, cash equal to such fraction multiplied 'by the then Fair Market Value of one fuil share of
COmtUOn Stock, together with any other stock or' other securities and property (including cash, where
applicable) to which such Holder is entitled upon such exercise pW'suant to Section 1 or otherwise. The
Company understands that a delay in the delivery of the Warrant Shares after the Warrant Share Delivery
Date could result in economic loss to the Holder.
2.
Cashless El'ercise.
(a)
Payment upon exercise maybe made at the option of the Holder either in 0) cash,
wire transfer or by certified or official bank check payable to the order of the Company equal to the
applicable aggregate Purchase Price, (ii) by delivery of Common Stock issuable upon exercise of the
Warrants in accordwlce with Section (b) below or (iii) by a combination of any of the foregoing methods,
for the number of Common Stock specified in such form (as such exercise number shall be adjusted to
reflect any adjustment in the total number of shares of Common Stock issuable to the holder per the terms
of this Warrant) and the holder shall t11ereupon be entitled to receive the number of duly authorized,
validly issued, fully-paid and non-assessable shares of Common Stock (or Other Securities) determined (1.9
provided here.i/!.
(b)
Subject to the provisions herein to the contrary, if the Fair Market Value of one
share of Common Stock is greater than the Purchase Price (at the date of calculation as set forth below),
in lieu of exercising this Warrant for cash, the holder may elect to receive shares equal to the value (as
detel1l1ined below) of this Warrant (or the portion thereof being cancelled) by surrender of this Warrant at
the principal office of the Company together with the properly endorsed Subscription FOlm in which
event the Company shall issue to the holder a number of shares of Common Stock computed using the
following formula:
X~y
(A-B)
A
Where
(Warrant)
312/2010,10:06 AM
X~
the number of shares of Common Stock to be issued to the holder

y=
the number of shares of Common Stock purchasable under the Warrant

or, if only a portion df the Warrant is being exercised, the portion of the
Warrant being exercised (at the date of such calculation)
A=
the average of the closing sale prices of the Commol' Stock for the five.
(5) Trading Days immediately prior to (but not including) the Exercise
Date, or Fair Market Value, whichever is less
B~
Purchase Price (as adjusted to the date of such caiculation)
For purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood and
acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have
been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have
commenced, on the date this Warrant was originally issued pursuant to the Subscription Agreement.
3,
Adjustment for Reorjanization, Consolidation.. Merger, etc.
3:1.
Fundamental Transaction. If, at any time while this WruTant is outstanding, (A)
the Company effects any merger or consolidation of the Company with or into another entity, (B) the
Company dfects any sale of all or substantially all of its assets in one or a series of related transactions,
(C) any tender offer or exchange offer (whetber by the Company Of another entity) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their shru'es for other securities,
cash or property, (D) the Company consummates a stock purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of
arrangement) with one or more persons or elltities whereby such other persons or entities acquire more
than the 50% ?f the ontstanding shru'es of Common Stoe\( (not including any shares of Common Stock
held by such other persons or entities making or party to, or associated or affiliated with the other persons
or entities making or party to, such stock purchase agreement or other business combination), (E) any
"person" or "group" (as these terms are used for purPoses of Sections 13(d) and 14(d) of the 1934 Act) is
or shall become the "beneficial owner" (as defmed in Rule l3d-3 under the 1934 Act), directly or
indirectly, of 50% of the aggregate Common Stock of the Company, or (F) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a
"Fundamental Transaction"), then, upon any subsequent exercise of this Warrant, tbe fIolder shall have
the right to receive, for each Warrant Share that would have been issuable upon such exercise
immediately prior to the OCClllTeJlce of such Fundamental Transaction, at the option of the Holder, upon
exe.rcise of this Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the
"Alternate Consideration") receivable upon or as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a fIolder of the number 0f shares of Common Stock for which
this Warrant is exercisable ,immediately prior to such event or For purposes of any such exercise, the
determination of the Purchase Price shall be appropriately adjusted to apply to such Alternate
Consideration based Oil the amount of Alternate Consideration issuable in respect of one share of
Common Stock in such Fundamental Transaction, and the Company shall apportion the Purchase Price
among the Alternate Consideration in a reasonable manner reflecting the relative value of any different
compot)ents of the Altemate Consideration, If holders of Common Stock are given any cboice as to the
securities, cash or property to be received in .a Fundamentill Transaction, then the Holder shall be given
the same choice as to the Alternate Consideration it receives upon any exercise or this Warrant following
such Fundamental Transaction, To the extent t)ecessary toeffectnate the foregoing provisions, ruly
successor to the Company or surviving entity in such Fundamental nat)saction shall issue to the Holder a
new warrant consistent with the foregoing provisions and evidencing the Holder's right to exercise such
warrant into Altemate Consideratiou. The terms .of any agreeml'nt pursuant to wbich a Fundamental
Transaction is effected shall include terms requiring any such succes'sor or surviving entity to comply
(Warrant)
312flOlO, 10:06 AM
with the provisions of this Section 3.1 and insuring that this Warrant (or any such replacement security)
will be similarly adjusted upon any subsequent transaction analogous to a fundan1ental Transaction.
3.2.
Dissolution. In the event o.f any dissolution of the Co.mpany fo\lo.w:ing the
transfer of all or substantially all of its properties or assets, the Co.mpany, prior to such dissolution, shall
at its expense deliver or cause to be delivered the stock and other securities and property (including cash,
where applicable) receivable by the Holder of the Warrants after the effective date of such dissolution
pursuant to this Section 3 to a bank or trust company (a "Trustee") having its principal effice in
New York, NY, as trustee for the Holder ef the Warrants. Such property shall be delivered only upon
payment of the Warrant exercise price.
3.3.
Continua1ion of Iyrms. Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall
co.ntinue in full force and effect and the terms hereof shall be applicable to the Other Securities and
property receivable on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date ef dissolutien following any such transfer, as the case may
be, and shall he binding upon the issuer ef any, Other Securities, including, in the case of any such .
transfer, the persen acquiring all or substantially allof the pro.perties or assets of the Cempany, whether
or not such perSOn shall have expressly assumed the terms of this Warrant as previded in Section 4. In
the event thi.$ WalTant dees not continue in full force and effect after the consummation of the transaction
described in this Section 3, then only in suchevent will the Company's securities and property (including
cash, where applicable) receivable by the Holder of 'the Warrants be delivered to the Tru.iee as
contemplated by Section 3.2.
3,4
Share Issuanoe. Until the Expiration Date, if the Company shall issue liny
Common Stock except for the Excepted Issuances (as defined in the Subscription Agreement), prior to the
complete exercise of this Warrant for a consideratien less than the Purchase Price that would be in effect
at the time of such issue, then, and thereafter succeSSively upen each such issue, the Purchase Price shall
be reduced to. such other lower price for then outstanding Warrants. Fer purposes of this adjustment, the
issuance of any security er debt instrument of the Company carrying the right to. convert such security or
debt instrument into Commo.n Stock or of any warrant, right or option to purchase Common Stock shall
result in an adjustment to the Purchase Price upon the exercise of the above-described security, debt
instrument, warrant, right, or eptien if such exerdse is at a price lower than the Purchase Price in effect
upon slIch issuance and again at any time upon any subsequent issuances of shares of Common Stock
upon exercise of such conversien or purchase rights if such exercise is at a price lower than the Purcbase
Price in effect upen such issuance. The reduction of the Purchase Price described in this Section 3.4 is
subject to the provisions of, and in addition to the other rights of the Holder described in, the Subscription
Agreement. The number of shares ef Common Stock that the Holder of this Warrant shall thereafter, on
the exercise hereof, be entitled to receive shall
adjusted to a number determined hy multiplying tlle
number of shares of Commen Stock that would etherwise (but for the provisions of this Secti.on 3.4) be
i~suable on such exercise by a fraction of which (a) the numerator is the Purchase Price that would
otherwise (but for the provisions of this Section 3.4) be in effect, w\d (b) the denominator is the Purchase
Price in effeot on the date of such exerc,ise.
be
4.
Extraordini!J:Y Events Regarding Common Stock. In the evellt that the Company shall
(a) issue additional shares of the Cornmoll. Stock as a dividend or other distribution 011 outstanding
Common Steck, (b) subdivide its outstanding shares ef Commen Stock:, er(e) combine its outstanding
shares of the Common Stock into a smaller number of shares of the COmmon Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening ef such event, be adjusted by
multiplying the then Purchase Price by a fraction, the numerator of which shall be the number of shares of
Common Steck outstanding immediately prior to such event and the denominator of which shall be the
number of shares of Common Stock outstanding innllediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase Price, as so adjusted, shall be
(Warrant)
312/2010, 10:06 AM
readjusted in the same manner upon the happening of any successive event or events described herein in
this Section 4. The number of shares of Commo)1 Stock that the Holder of this Warrant shall thereafter, on
the exercise hereof, be entitled to receive shall be adjusted to a numher determined by multiplyiug the
. number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be
issuable on such exercise by a fraction of .which (a) the numerator is the Purchase Price that would
otherwise (but for the provisions of this Section 4) be in effect, and (b) the denominator is the Purchase
Price in effect on the date of such exercise.
5.
Certificate as to Adjustments. 'In each case of any adjustment or readjustment in the
shares of Common Stock (or Other Securities) issuable on the exercise ofthe Warrants, the Company at
its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such
. adjustment or readjustment in accordanc~ with the tenns of the Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing ill detail the facts upon which such adjustment or
readjustment is based, including a statemeot of (a) the consideration received or receivahle by the
Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to
have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or
deemed to be outstandiug, and (c) the Purchase Price aDd the number of shares of Common Stock to be
received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment
and as adjusted Or readjusted as provided in this Warrant. The Company will forthwith mail a copy of
each such certificate to the Holder of the Warrant and any Warrant Agent of the Company (appointed
pursuant to Section 11 hereof).
6.
Reservation of StoSik etc. rRsuableon Exerc.ise of Warrant: Finllllcial Statements. The
Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of
the Warrants, all shares of Common Stock (or Other Securities) from time to time issuable on the exercise
of the Warrant. ThiS Warrant entitles the Holder hereof to receive copies of all .financial and other
infonlJation distributed or required to be distributed to the holders of the Company's Common Stock.
7.
Assignment; Exchange of WIWllllt. Subject to compliance with applicable securities
laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder hereof (a
"Transferor"). On the surrender for exchange of this Warrant, with the Transferor's endorsement in the
form of Exhibit B attached hereto (the "Transteror.Endorsement Form") and together with an opinion of
counsel reasonably satisfuctory to the Company that tlle transfer of this Warrant will be in compliance
with applicable securiti.es laws, the Company will j~sue and deliver to or on the order of the Transferor
thereof a new Warrant or Warrants of like tenor, in the name of the Transferor and/or the transfuree(s)
specified in such Transferor Endorsettl<wt l'onn (each a "Transferee"), calling ill the a.ggregate on the face
or f"c~t thereof for th" n11mh",r nf shares of Common, Stock called for on the fuce or faces ohhe Warrant
so surrendered by the Transferor.
on
8.
R.eplacemcqt of Warrant.
receipt of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to the Company or, in til" case of any such mutilation, on surrender and cancellation of
this Warrant, the Company at its expense, twice only, will execute and deliver, in lieu thereof, a new
Warrant oflike tenor.
9.
B,egistration B,ights. The Holder of this Warrant has been granted certain registration
rights by the Company. These registration rights are set forth ill the Registration Rights Agreement.
10.
Maximum Exercise. The Holder shall not be entitled to exercise this Warrant on an
exercise date, in connection with that number of shares of Common Stock which wonld be in excess of
the sum of (i) the number of shares of Common Stock beneficially o'lvned by the Holder and its affiliates
on an exercise date, and (Ii) the number of shares of COllU)10n Stock issuable upon the exercise of this
(Warrant)
3t.1!2010, 10;06 AJVl
,6

Warrant with respect to which the determination of this limitation is being made on an exercise date,
which would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock on such date. For the purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities
1934 Act , and Rule \3d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to
aggregate exercises which would result in the issuance of more than 4.99%. The restriction described in
this paragraph may be waived, in whole or in part, upon sixty-one (6\) days prior notice from the Holder
to the Company to increase such percentage to up to 9.99%, but not in excess of9.99%. The HoldeI' may
decide wh<i>ther to convert a Convertible Note or exercise this Warrant to achieve an lWtuaJ 4.99% or up to
9.99% ownership position as described above, but not in excess of 9.99%. The Warrants may not be
exercised if it will put the Investor over the 9.99% mark.
11.
WalTant Agent. The Company may, by written notice to the Holder of the Wao:ant,
appoint an agent (a "Warrant Agent") for the purpose of issuing Common Stock (or Other Secmjties) on
the exercise of this Warrant pursuant to Section 1, exchanging this Wan'ant pursuant to Section 7, and
replacing this Warrant pursuant to Section 8, or any of the foregoing, aod thereafter any such iss1llllIce,
exchange Qr replacement, a.~ the case may be, shall b. made at such office by such Warrant Agent.
12.
Transfer on the Company's Books. Until this Warrant is transferred on the books of dIe
Company, th$ Company may treat the registered holder bereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.
13.
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 0)
personally served, (ii) deposited in Hie 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 pemiitted
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 dming 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 Il.Onllal business hours where such ootice is to be received) or (b) 00 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 occm. The addresses for such communications shall
be: ifto the Company, to: Marani Brands, 10c.13l52 Raymer Street Suite lA North Hollywood, CA
91605.
14.
Law Goveming This Warrant. This Warrant shall be governed by and constrm;d in
accordance with the laws of the State of New York: without regard to principles of conflicts oflaws. Any
action brought by either party against the other concerning the transactions contemplated by this Warrant
shall be brought only in the state courts of New York or in the fedetal courts located in the state and
county of New York. The parties to this Warrant hereby ilTevocably waive any objectiot\ to jurisdiction
and venue ohny action instituted hereunder and shall not assert any defense based on lack of jurisdiction
or venue. or based upon forum non conveniens.. The Company and Holder waive trial by jury. The
prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.
10. the eveot that any provision of.this Warrant 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 contlict therewith and shall be deemed modified to confornl with
such statute or rule of law. Any such provision which may prove invaHd or unenforceable under any law
shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby
im)vocably waives persol1l\l service of prOcess and consents to process being served in any suit, action or
pr'lceeding in connectiol1 with this Agreement or any other Transaction Document by mailing a copy
(W""""t)
31212010, )0:06 AM

thereof via registered Or certified mail or overnight delivery (with evidence of delivery) to such party at
the address ill effect for notices to it under thi8 Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any tight to serve process in any other I!lanner permitted by law.
(Warrant)
31212010,10:06 AlI-!

IN WITNESS WHEREOF, the Company has executed this Wwallt as of the date first written
above.
MARANI BRANDS, lNC.
By:
(Warr"'t)
31212010, 10:06 AM
_~
5Z'~
Name: M
it Eyraud
ExhihitA
FORM OF SUBSCRIPTION
(to be signed only on exercise of Warrant)
TO : Marani Brands, Inc.
The undersigned, pursuant to the provIsions set forth
irrevocably elects to purchase (cheek applicable box):
III
the attached Warrant (No.~, hereby
_____ shares of the Common Stock covered by such Warrant; or

the maximum number of shares of Common Stock covered by such Warrant pursuant to the
cashless exercise procedure set forth in Section 2.
The undersigned herewith makes payment of the full pllTcbase price for such shares at the price per share
provided for in such Warrant, which is
Such payment takes the form of (check applicable
box or boxes):
$'----'-_ _ in lawful money of the United States; andlor

if applicable, the cancellation of such portion of the attached Wamlnt as is exercisable for a total
shares of Common Stock (using a Fair Market Value of $
per share for purposes of
this calculation); andior
of
if applicable, the cancellation of such number of shares of Common Stock a.~ is necessary, in
accordance with the form.ula set forth in Section:t, to exercise this Warrant with respect to the maximum
number of shru:e.~ of Common Stock purchasable pursuant to the cashless exercise procedure set forth in
Section 2.
The undersigned requests that the certificates for such shares be Issued in thtl 1I1l111t: uf, aI\d delivcred to
address
is
whose
The undersigl,led represents and warrants that all offers and sales by the undersigned of the securities
issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock
under the Securities Act of 1933, as amended (the "Securities Act"), or pursuant to an exemption from'
registration under the Securities A c t . '
(Signature must conform to name of holder as

specified on the face of the W!lITant)
(Address)
(W=t)
312/2010, lM6 AM
10

ExhibitB
FORM OF TRANSFEROR ENDORSEMENT

(To be signed only on transfer ofWamUlt)
, For value received, the undersigned hereby sells, assigns, and transfers unto the person(s)
named below under the heading "Transferees" the right represented by the within Warrant to purchase the
percentage and number of shares of Common Stock of Marani Brands, Inc. to which the within Warrant
relates specified under the headings "Percentage Transferred" and "Number Transferred," respectively,
opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective
right Oil the books of Marani Brands, Inc. wjth full power of substitution in the premises,
Transferees
Perc!)llt""'e Transff'n-ed
Number Transferred
w."
Dated: _ _ _ _ _ _ _ _ _ __
(Signature must conform to name ofhoJder as specitled

on the face ofthe warrant)
Signed in the presence of:
(Name)
(address)
ACCEPTED AND AGREED:

[TRANSFEREE]
(address)
(Name)

Bodie V Marani Complaint

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Case 8:14-cv-00308-JLS-AN Document 1 Filed 03/03/14 Page 1 of 56 Page ID #:1

Case 8:14-cv-00308-JLS-AN Document 1 Filed 03/03/14 Page 2 of 56 Page ID #:2

Convertible Note); Subscription Agreement, a true and correct copy of which is

correct copy of which is attached hereto at Exhibit 3 (the Warrant). A dispute

Bodies debt, conversion rights and Warrant exercise.

With respect to the conversions of the Convertible Note, the dispute

Bodie would be entitled to at least 62 million shares of Marani stock in excess of

shares for more than $1 million.

In addition, Bodie contends that with respect to two conversions, in

CORRIGAN & MORRIS, LLP

Case 8:14-cv-00308-JLS-AN Document 1 Filed 03/03/14 Page 3 of 56 Page ID #:3

2.1(c) of the Convertible Note, resulting in a drastic reduction in the number of

result of Maranis improper limitation on Bodies conversion rights.

Separately, with respect to Bodies Warrant exercise on December 5,

Marani common stock. Bodie suffered damages of at least $3000 as a result of

such discrepancy in the number of shares issued to Bodie.

As a result of all of the foregoing, Bodie has suffered money damages

in an amount in excess of this Courts judicial minimum, and in any event in

excess of $1 million, in an amount to be determined at trial.

Bodie is informed and believes that Marani contends that Bodie

stock and no more debt.

Bodie is a Delaware corporation, whose sole officer is located in

is a Nevada corporation with its principal offices located in Tustin, California.

CORRIGAN & MORRIS, LLP

Case 8:14-cv-00308-JLS-AN Document 1 Filed 03/03/14 Page 4 of 56 Page ID #:4

JURISDICTION AND VENUE

This Court has jurisdiction over this action pursuant to 28 U.S.C.

matter in controversy exceeds the sum or value of $75,000, exclusive of interest

Venue is proper in this judicial district pursuant to 28 U.S.C.

1391(a), in that it is a judicial district in which a substantial part of the events or

Paragraph 2.1 of the Convertible Note provides a mechanism to

provision provides, in relevant part:

CORRIGAN & MORRIS, LLP

Case 8:14-cv-00308-JLS-AN Document 1 Filed 03/03/14 Page 5 of 56 Page ID #:5

or any shares of capital stock of Borrower into which such

D. Share Issuance. So long as this Note is outstanding, if the

CORRIGAN & MORRIS, LLP

Case 8:14-cv-00308-JLS-AN Document 1 Filed 03/03/14 Page 6 of 56 Page ID #:6

to purchase Common Stock shall result in an adjustment

(d) Whenever the Conversion Price is adjusted pursuant to

written demands on Defendant, through its counsel, demanding compliance with

Defendant has conceded would require an adjustment to the Conversion Price.

On or around February 19, 2014, after Bodies final conversion

Case 8:14-cv-00308-JLS-AN Document 1 Filed 03/03/14 Page 7 of 56 Page ID #:7

documents, and to re-compute the number of shares due to Bodie pursuant to

$31,907.23 and principal of $100,000.00):

Case 8:14-cv-00308-JLS-AN Document 1 Filed 03/03/14 Page 8 of 56 Page ID #:8

FIRST CLAIM FOR RELIEF

Breach of Convertible Note

Plaintiff realleges paragraphs 1 through 16, inclusive.

On or around February 1, 2010, Bodie entered into a written

of the Convertible Note, including, without limitation, paying to Marani $100,000

on or around February 1, 2010.

a. Marani failed to convert Bodies debt into stock at the conversion

prices dictated by section 2.1(c) of the Convertible Note;

Case 8:14-cv-00308-JLS-AN Document 1 Filed 03/03/14 Page 9 of 56 Page ID #:9

adjustment under section 2.1(c), despite its express obligation to do

so on a timely basis under section 2.1(d) of the Convertible Note.

conversion price dictated by sections 2.1(b) and 2.1(c) on the

grounds that such conversion price was less than Maranis

purported par value of $.001 in November 2010 and November

As a direct and proximate result of such breaches by Marani, Bodie

Convertible Note and the express promises therein made by Marani.