THIS SUBSCRIPTION AGREEMENT RELATES TO A PRIVATE OFFERING OF SECURITIES IN A
TRANSACTION TO PERSONS WHO ARE ACCREDITED INVESTORS (AS DEFINED HEREIN) PURSUANT
TO REGULATION D UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“1933 ACT”).
 
NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT (THE “SUBSCRIPTION
AGREEMENT”) RELATES HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933 (THE “1933 ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, EXCEPT IN
ACCORDANCE WITH PROVISIONS OF THE 1933 ACT, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.
 
SUBSCRIPTION AGREEMENT
(U.S. Subscribers)
 

TO:
Skins Inc. (the “Company”)

  1115 Broadway, 12th Floor

  New York, NY 10010

 
Purchase of Units
 
1.
Subscription

 
1.1 On the basis of the representations and warranties and subject to the terms
and conditions set forth herein, ____________________(the “Subscriber”) hereby
irrevocably subscribes for and agrees to purchase ____________  units (the
“Units”) at a price per Unit of US$0.20 (such subscription and agreement to
purchase being the “Subscription”), for an aggregate purchase price of US$
__________ (the “Subscription Proceeds”).
 
1.2 Each Unit will consist of one share of common stock of the Company (each, a
“Share”) and one common share purchase warrant (each, a “Warrant”) subject to
adjustment. Each Warrant shall be non-transferable and shall entitle the holder
thereof to purchase one share of common stock in the capital of the Company
(each, a “Warrant Share”) for a period of twenty four (24) months commencing
from the Closing (as defined hereafter), at a price per Warrant Share of
US$0.40. Certificate(s) representing the Warrants will be in the form attached
as Exhibit A. The Shares, Warrants and the Warrant Shares are referred to as the
“Securities”.
 
1.3 On the basis of the representations and warranties and subject to the terms
and conditions set forth herein, the Company hereby irrevocably agrees to sell
the Units to the Subscriber.
 
1.4 Subject to the terms hereof, the Subscription will be effective upon its
acceptance by the Company.
 
2.
Payment

 
2.1 At the Closing (as defined below), the Subscription Proceeds shall be paid
by wire transfer to the Company pursuant to the wiring instructions below:
 
Skins Footwear Inc.
Wachovia Bank
Account # 200 0013527206
Routing # 021 200025
 

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2.2 The Subscriber acknowledges and agrees that this Subscription Agreement and
any other documents delivered in connection herewith will be held on behalf of
the Company. In the event that this Subscription Agreement is not accepted by
the Company for whatever reason, which the Company expressly reserves the right
to do, within 15 days of the delivery of an executed Subscription Agreement by
the Subscriber, this Subscription Agreement and any other documents delivered in
connection herewith will be returned to the Subscriber at the address of the
Subscriber as set forth in this Subscription Agreement. At the Closing, the
Company will provide a fully executed Subscription Agreement to the Subscriber
and the Subscriber shall effect the wire transfer of the Subscription Proceeds
to the Company.
 
3.
Documents Required from Subscriber

 
3.1 The Subscriber must complete, sign and return to the Company an executed
copy of this Subscription Agreement.
 
3.2 The Subscriber shall complete, sign and return to the Company as soon as
possible, on request by the Company, any documents, questionnaires, notices and
undertakings as may be required by regulatory authorities, the OTC Bulletin
Board and applicable law.
 
4.
Closing

 
4.1 Closing of the offering of the Securities (the “Closing”) shall occur on or
before April 11, 2008, or on such other date as may be determined by the Company
with the Subscriber's consent (the “Closing Date”). At the Closing, the Company
shall (i) provide a fully executed Subscription Agreement to the Subscriber,
(ii) provide a fully executed Warrant agreement to the Subscriber, and (iii)
deliver irrevocable instructions to its transfer agent to deliver a stock
certificate representing the Shares to the Subscriber at the address indicated
at the end of this Subscription Agreement (with a copy of such instructions to
the Subscriber). At the Closing, the Subscriber shall effect the wire transfer
of the Subscription Proceeds to the Company pursuant to Section 2 hereof.
 
5.
Acknowledgements of Subscriber

 
5.1 The Subscriber acknowledges and agrees that:
 

 
(a)
the Securities are being offered and sold under one or more of the exemptions
from registration provided for in Section 4(2) of the 1933 Act of 1933, as
amended (the “1933 Act”), including Regulation D promulgated thereunder, and any
applicable state securities laws, (b) the Securities are restricted securities
and may not be resold or otherwise transferred without registration or further
exemption; and (c) this transaction has not been reviewed or approved by the
United States Securities and Exchange Commission or by any regulatory authority
charged with the administration of the securities laws of any state or foreign
country. The Subscriber represents and warrants that it is an accredited
investor within the meaning of Rule 501(a) promulgated under the 1933 Act;

 

 
(b)
the Subscriber understands that the Securities, have not been, and will not be,
registered under the 1933 Act by reason of a specific exemption from the
registration provisions of the 1933 Act, the availability of which depends upon,
among other things, the bona fide nature of the investment intent and the
accuracy of the investor’s representations as expressed herein or otherwise made
pursuant hereto;

 

 
(c)
the Subscriber is acquiring the Securities, for investment for its own account,
not as a nominee or agent, and not with the view to, or for resale in connection
with, any distribution thereof, and that the Subscriber has no present intention
of selling, granting any participation in, or otherwise distributing the same;

 
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(d)
the Subscriber has sufficient knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an investment
in the Securities. The Subscriber, or the Subscriber’s professional advisor, has
the capacity to protect the Subscriber’s interests in connection with the
purchase of the Securities, and the Subscriber is able to bear the economic risk
of an investment in the Securities, to hold the Securities for an indefinite
period of time and to suffer a complete loss of its investment;

 

 
(e)
the Subscriber is an “accredited investor” within the meaning of Regulation D,
Rule 501(a), promulgated by the Securities and Exchange Commission under the
1933 Act and shall submit to the Company such further assurances of such status
as may be reasonably requested by the Company;

 

 
(f)
the Subscriber acknowledges that the Securities must be held indefinitely unless
subsequently registered under the 1933 Act or an exemption from such
registration is available;

 

 
(g)
the Subscriber understands and agrees that the certificates evidencing the
Securities, or any other securities issued in respect of the Securities upon any
stock split, stock dividend, recapitalization, merger, consolidation or similar
event, shall bear a legend substantially in the form below (in addition to any
legend required under applicable state securities laws):

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
UNDER APPLICABLE STATE LAW AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
PLEDGED UNLESS COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE LAW, A TRANSFER
MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES AND EXCHANGE COMMISSION,
OR (IF REASONABLY REQUIRED BY THE COMPANY) AN OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION..”
 

 
(h)
other than as set out herein, the Company has not undertaken, and will have no
obligation, to register any of the Securities under the 1933 Act or any other
securities legislation;

 

 
(i)
it has received and carefully read this Subscription Agreement;

 

 
(j)
the decision to execute this Subscription Agreement and purchase the Securities
agreed to be purchased hereunder has not been based upon any oral or written
representation as to fact or otherwise made by or on behalf of the Company and
such decision is based entirely upon a review of any public information which
has been filed by the Company with the Securities and Exchange Commission
(“SEC”) in compliance, or intended compliance, with applicable securities
legislation, and the Subscriber acknowledges that it has received and reviewed a
copy of the Company’s Form 10-KSB for the year ended December 31, 2006 as filed
with the SEC, in addition to the quarterly reports for the first, second, and
third quarter for 2007, in addition to the other reports filed with the SEC
during 2007 and 2008;

 

 
(k)
it and its advisor(s) have had a reasonable opportunity to ask questions of and
receive answers from the Company in connection with the sale of the Securities
hereunder, and to obtain additional information, to the extent possessed or
obtainable by the Company without unreasonable effort or expense;

 

 
(l)
the books and records of the Company were available upon reasonable notice for
inspection, subject to certain confidentiality restrictions, by the Subscriber
during reasonable business hours at its principal place of business and that all
documents, records and books in connection with the sale of the Securities
hereunder have been made available for inspection by him and his attorney and/or
advisor(s);

 
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(m)
all information which the Subscriber has provided to the Company is correct and
complete as of the date the Subscription Agreement is signed, and if there
should be any change in such information prior to this Subscription Agreement
being executed by the Company, the Subscriber will immediately provide the
Company with such information;

 

 
(n)
the Company is entitled to rely on the representations and warranties of the
Subscriber contained in this Subscription Agreement and the Subscriber will hold
harmless the Company from any loss or damage it or they may suffer as a result
of the Subscriber’s failure to correctly complete this Subscription Agreement;

 

 
(o)
the Subscriber will indemnify and hold harmless the Company and, where
applicable, its respective directors, officers, employees, agents, advisors and
shareholders from and against any and all loss, liability, claim, damage and
expense whatsoever (including, but not limited to, any and all fees, costs and
expenses whatsoever reasonably incurred in investigating, preparing or defending
against any claim, lawsuit, administrative proceeding or investigation whether
commenced or threatened) arising out of or based upon any representation or
warranty of the Subscriber contained herein or in any document furnished by the
Subscriber to the Company in connection herewith being untrue in any material
respect or any breach or failure by the Subscriber to comply with any covenant
or agreement made by the Subscriber to the Company in connection therewith;

 

 
(p)
the Subscriber has been advised to consult the Subscriber’s own legal, tax and
other advisors with respect to the merits and risks of an investment in the
Securities and with respect to applicable resale restrictions, including without
limitation registration restrictions under Rule 415 of the 1933 Act, and it is
solely responsible (and the Company is not in any way responsible) for
compliance with:

 

 
(i)
any applicable laws of the jurisdiction in which the Subscriber is resident in
connection with the distribution of the Securities hereunder, and

 

 
(ii)
applicable resale restrictions;

 

 
(q)
none of the Securities are listed on any stock exchange or automated dealer
quotation system and, other than as set out herein, no representation has been
made to the Subscriber that any of the Securities will become listed on any
stock exchange or automated dealer quotation system, except that currently
certain market makers make market in the common shares of the Company on the
Financial Industry Regulatory Authority, Inc.’s (“FINRA”) OTC Bulletin Board;

 

 
(r)
the Company will refuse to register any transfer of the Securities not made in
accordance with an effective registration statement under the 1933 Act or
pursuant to an available exemption from the registration requirements of the
1933 Act and in each case in accordance with applicable state securities laws;

 

 
(s)
neither the SEC nor any other securities commission or similar regulatory
authority has reviewed or passed on the merits of the Securities;

 

 
(t)
no documents in connection with the sale of the Securities hereunder have been
reviewed by the SEC or any state securities administrators;

 

 
(u)
there is no government or other insurance covering any of the Securities;

 

 
(v)
the issuance and sale of the Securities to the Subscriber upon the closing of
this offering will not be completed if it would be unlawful or if, in the
discretion of the Company acting reasonably, it is not in the best interests of
the Company;

 
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(w)
the Subscriber is purchasing the Securities pursuant to an exemption from the
registration and the prospectus requirements of applicable securities
legislation on the basis that the Subscriber is an accredited investor of the
Company and, as a consequence:

 

 
(i)
is restricted from using most of the civil remedies available under securities
legislation,

 

 
(ii)
may not receive information that would otherwise be required to be provided
under securities legislation, and

 

 
(iii)
the Company is relieved from certain obligations that would otherwise apply
under securities legislation;

 

 
(x)
this Subscription Agreement is not enforceable by the Subscriber unless it has
been accepted by the Company.

 
6.
Representations, Warranties and Covenants of the Subscriber

 
6.1 The Subscriber hereby represents and warrants to and covenants with the
Company (which representations, warranties and covenants shall survive the
Closing) that:
 

 
(a)
the Subscriber is an “accredited investor” within the meaning of Regulation D,
Rule 501(a), promulgated by the Securities and Exchange Commission under the
1933 Act and shall submit to the Company such further assurances of such status
as may be reasonably requested by the Company;

 

 
(b)
the Subscriber is acquiring the Securities, for investment for its own account,
not as a nominee or agent, and not with the view to, or for resale in connection
with, any distribution thereof, and that the Subscriber has no present intention
of selling, granting any participation in, or otherwise distributing the same;

 

 
(c)
the Subscriber has the legal capacity and competence to enter into and execute
this Subscription Agreement and to take all actions required pursuant hereto
and, if the Subscriber is a corporation, it is duly incorporated and validly
subsisting under the laws of its jurisdiction of incorporation and all necessary
approvals by its directors, shareholders and others have been obtained to
authorize execution and performance of this Subscription Agreement on behalf of
the Subscriber;

 

 
(d)
if the Subscriber is a corporation or other entity, the entering into of this
Subscription Agreement and the transactions contemplated hereby do not and will
not result in the violation of any of the terms and provisions of any law
applicable to, or the charter documents of, the Subscriber or of any agreement,
written or oral, to which the Subscriber may be a party or by which the
Subscriber is or may be bound;

 

 
(e)
the Subscriber has duly executed and delivered this Subscription Agreement and
it constitutes a valid and binding agreement of the Subscriber enforceable
against the Subscriber;

 

 
(f)
the Subscriber is acquiring the Securities as principal for its own account for
investment purposes only and not for the account of any other person and not for
distribution, assignment or resale to others, and no other person has a direct
or indirect beneficial interest in such Securities, and it has not subdivided
its interest in the Securities with any other person;

 

 
(g)
the Subscriber is acquiring the Securities as principal for the Subscriber’s own
account for investment purposes only, and not with a view to, or for, resale,
distribution or fractionalisation thereof, in whole or in part, and no other
person has a direct or indirect beneficial interest in the Securities;

 
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(h)
the Subscriber is aware that an investment in the Company is speculative and
involves certain risks, including the possible loss of the entire investment and
it has carefully read and considered the matters set forth under the heading
“Risk Factors” appearing in the Company’s Form 10-KSB and any other filings
filed with the SEC;

 

 
(i)
the Subscriber has made an independent examination and investigation of an
investment in the Securities and the Company and has depended on the advice of
its legal and financial advisors and agrees that the Company will not be
responsible in any way whatsoever for the Subscriber’s decision to invest in the
Securities and the Company;

 

 
(j)
the Subscriber (i) has adequate net worth and means of providing for its current
financial needs and possible personal contingencies, (ii) has no need for
liquidity in this investment, and (iii) is able to bear the economic risks of an
investment in the Securities for an indefinite period of time;

 

 
(k)
the Subscriber understands and agrees that the Company and others will rely upon
the truth and accuracy of the acknowledgements, representations and agreements
contained in this Subscription Agreement and agrees that if any of such
acknowledgements, representations and agreements are no longer accurate or have
been breached, the Subscriber shall promptly notify the Company;

 

 
(l)
the Subscriber has the legal capacity and competence to enter into and execute
this Subscription Agreement and to take all actions required pursuant hereto;

 

 
(m)
the Subscriber has duly executed and delivered this Subscription Agreement and
it constitutes a valid and binding agreement of the Subscriber enforceable
against the Subscriber in accordance with its terms;

 

 
(n)
the Subscriber is not an underwriter of, or dealer in, the common shares of the
Company, nor is the Subscriber participating, pursuant to a contractual
agreement or otherwise, in the distribution of the Securities;

 

 
(o)
it is not an underwriter of, or dealer in, the common shares of the Company, nor
is the Subscriber participating, pursuant to a contractual agreement or
otherwise, in the distribution of the Securities;

 

 
(p)
the Subscriber understands and agrees that none of the Securities have been or
will, except as set forth in this Agreement, be registered under the 1933 Act,
and, unless so registered, may not be offered or sold in the United States or,
directly or indirectly, except in accordance with an effective registration
statement under the 1933 Act, or pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the 1933 Act and in
each case only in accordance with applicable state securities laws;

 

 
(q)
the Subscriber understands and agrees not to engage in any hedging transactions
involving any of the Securities unless such transactions are in compliance with
the provisions of the 1933 Act and in each case only in accordance with
applicable state securities laws;

 

 
(r)
the Subscriber understands and agrees that the Company will refuse to register
any transfer of the Securities not made in accordance with an effective
registration statement under the 1933 Act or pursuant to an available exemption
from the registration requirements of the 1933 Act;

 

 
(s)
the Subscriber (i) is able to fend for itself in the Subscription; (ii) has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of its investment in the Securities and the
Company; and (iii) has the ability to bear the economic risks of its prospective
investment and can afford the complete loss of such investment;

 
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(t)
the Subscriber is not aware of any advertisement of any of the Securities and is
not acquiring the Securities as a result of any form of general solicitation or
general advertising including advertisements, articles, notices or other
communications published in any newspaper, magazine or similar media or
broadcast over radio or television, or any seminar or meeting whose attendees
have been invited by general solicitation or general advertising; and

 

 
(u)
no person has made to the Subscriber any written or oral representations:

 

 
(i)
that any person will resell or repurchase any of the Securities,

 

 
(ii)
that any person will refund the purchase price of any of the Securities,

 

 
(iii)
as to the future price or value of any of the Securities, or

 

 
(iv)
other than as set out herein, that any of the Securities will be listed and
posted for trading on any stock exchange or automated dealer quotation system or
that application has been made to list and post any of the Securities of the
Company on any stock exchange or automated dealer quotation system, except that
currently the Company’s common shares are quoted on the over-the-counter market
operated by the FINRA’s Over-The-Counter Bulletin Board.

 
7.
Representations and Warranties will be Relied Upon by the Company

 
7.1 The Subscriber acknowledges that the representations and warranties
contained herein are made by it with the intention that such representations and
warranties may be relied upon by the Company and its legal counsel in
determining the Subscriber’s eligibility to purchase the Securities under
applicable securities legislation, or (if applicable) the eligibility of others
on whose behalf it is contracting hereunder to purchase the Securities under
applicable securities legislation. The Subscriber further agrees that by
accepting delivery of the certificates representing the Securities, it will be
representing and warranting that the representations and warranties contained
herein are true and correct as at the Closing Date with the same force and
effect as if they had been made by the Subscriber on the Closing Date and that
they will survive the purchase by the Subscriber of the Securities and will
continue in full force and effect notwithstanding any subsequent disposition by
the Subscriber of such Securities.
 
8.
Resale Restrictions

 
8.1 The Subscriber acknowledges that any resale of the Securities will be
subject to resale restrictions contained in the securities legislation
applicable to each Subscriber or proposed transferee. The Subscriber
acknowledges that the Securities have not been registered under the 1933 Act of
the securities laws of any state of the United States. The Securities may not be
offered or sold in the United States unless registered in accordance with United
States federal securities laws and all applicable state securities laws or
exemptions from such registration requirements are available.
 
8.2 The Subscriber acknowledges that restrictions on the transfer, sale or other
subsequent disposition of the Securities by the Subscriber may be imposed by
securities laws in addition to any restrictions referred to in Section 8.1
above, and, in particular, the Subscriber acknowledges and agrees that none of
the Securities may be offered or sold unless in accordance with the 1933 Act.
 
9.
Information Provided

 
9.1 The Subscriber has acknowledged that the decision to purchase the Securities
was solely made on the basis of information available to the Subscriber on the
EDGAR database maintained by the SEC at www.sec.gov (the “SEC Documents”).
 
9.2 The Company hereby represents and warrants to the Subscriber that the SEC
Documents comply in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended and the rules and regulations
promulgated thereunder and none of the SEC Documents contain an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
 
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10.
Legending of Subject Securities

 
10.1 The Subscriber hereby acknowledges that that upon the issuance thereof, and
until such time as the same is no longer required under the applicable
securities laws and regulations, the certificates representing any of the
Securities will bear a legend in substantially the following form:
 

 
“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
UNDER APPLICABLE STATE LAW AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
PLEDGED UNLESS COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE LAW, A TRANSFER
MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES AND EXCHANGE COMMISSION,
OR (IF REASONABLY REQUIRED BY THE COMPANY) AN OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.”

 
10.2 The Subscriber hereby acknowledges and agrees to the Company making a
notation on its records or giving instructions to the registrar and transfer
agent of the Company in order to implement the restrictions on transfer set
forth and described in this Subscription Agreement.
 
11.
Costs

 
11.1 The Subscriber acknowledges and agrees that all costs and expenses incurred
by the Subscriber (including any fees and disbursements of any special counsel
retained by the Subscriber) relating to the purchase of the Securities shall be
borne by the Subscriber.
 
12.
Resale Registration.

 
On or prior to the date that is the earlier of twenty one (21) days after the
Closing or ten (10) days after Company’s Form 10-KSB for 2007 is filed with the
SEC (the “Filing Date”), the Company shall prepare and file with the SEC a
"resale" Registration Statement providing for the resale of the Shares and the
Warrant Shares (collectively, the “Registrable Securities”) for an offering to
be made on a continuous basis pursuant and subject to Rule 415, which was
promulgated by the SEC pursuant to the 1933 Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the
SEC having substantially the same effect as such Rule (“Rule 415”). The
Registration Statement shall be on Form S-1 (except if the Company is not then
eligible to register for resale the Registrable Securities on Form S-1, in which
case such registration shall be on another appropriate form in accordance with
the Securities Act and the rules promulgated thereunder). The Company shall (i)
not permit any securities other than the Registrable Securities and the
securities to be listed on Exhibit B hereto to be included in the Registration
Statement and (ii) use its reasonable best efforts to cause the Registration
Statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof, but in any event prior to the date (the
“Effectiveness Date”) that is 120 days after the earlier of (i) the date of
filing of the Registration Statement, and (ii) the Filing Date, and to keep such
Registration Statement continuously effective under the Securities Act until
such date as is the earlier of (x) the date when all Registrable Securities
covered by such Registration Statement have been sold or (y) the date on which
the Registrable Securities may be sold without any restriction pursuant to Rule
144 as determined by the counsel to the Company pursuant to a written opinion
letter, addressed to the Company's transfer agent to such effect (the
"Effectiveness Period"). Notwithstanding anything to the contrary set forth in
this Subscription Agreement, in the event the SEC does not permit the Company to
register the “resale” of all of the Registrable Securities anticipated to be so
registered on such Registration Statement pursuant to Rule 415, the Company
shall register in the Registration Statement such number of Registrable
Securities as is permitted by the SEC, and the number of Registrable Securities
to be included in such Registration Statement or any subsequent registration
statement shall be determined on a pro rata basis among the Subscribers or in
such amounts as agreed upon by the Subscribers, where the amount of Shares and
Warrant Shares to be registered for a Subscriber to cut back proportionately or
as mutually agreed upon. In the event the SEC
does not permit the Company to register all of the Registrable Securities in the
Registration Statement, the Company shall use its best efforts to register the
Registrable Securities, subject to the foregoing sentence, that were not
registered in the Registration Statement as promptly as possible and in a manner
permitted by the SEC.
 
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13.
Registration Procedures.

 
13.1 In connection with the Company's registration obligations hereunder, the
Company shall:
 

 
(a)
not less than five (5) business days prior to the filing of the Registration
Statement or any related prospectus or any amendment or supplement thereto
(including any document that would be incorporated therein by reference), the
Company shall (i) furnish to the Subscriber copies of all such documents
proposed to be filed, which documents (other than those incorporated by
reference) will be subject to the review of the Subscriber, and (ii) cause its
officers and directors, counsel and independent certified public accountants to
respond to such inquiries as shall be necessary, in the reasonable opinion of
the Subscriber, to conduct a reasonable investigation within the meaning of the
Securities Act. Unless otherwise advised by outside counsel to the Company, the
Company shall not file the Registration Statement or any such prospectus or any
amendments or supplements thereto to which the Subscriber shall reasonably
object in writing within three (3) business days of its receipt thereof.

 

 
(b)
(i) Prepare and file with the SEC such amendments, including post-effective
amendments, to the Registration Statement as may be necessary to keep the
Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission
such additional Registration Statements as necessary in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related prospectus to be amended or supplemented by any required prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424
(or any similar provisions then in force) promulgated under the Securities Act;
(iii) respond as promptly as possible, but in no event later than ten (10)
business days, to any comments received from the SEC with respect to the
Registration Statement or any amendment thereto and as promptly as possible
provide the Subscriber true and complete copies of all correspondence from and
to the SEC relating to the Registration Statement; and (iv) comply in all
material respects with the provisions of the Securities Act and the Exchange Act
with respect to the disposition of all Registrable Securities covered by the
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the Subscriber thereof set forth in the
Registration Statement as so amended or in such prospectus as so supplemented.
The Company and the Subscriber agree that the Subscriber will suffer damages if
the Company fails to cause the Registration Statement to be declared effective
by the Commission on or before the Effectiveness Date. The Company and the
Subscriber further agree that it would not be feasible to ascertain the extent
of such damages with precision. Accordingly, if the Company fails to cause the
Registration Statement to be declared effective by the Commission on or before
the Effectiveness Date, the Company shall pay an amount in cash as liquidated
damages to the Subscriber equal to .025% for each day after the Effectiveness
Date until the Registration Statement is declared effective by the Commission.
Notwithstanding anything to the contrary contained herein, in no event shall any
liquidated damages be payable with respect to the delay caused solely due to a
Rule 415 comment by the SEC.

 

 
(c)
Notify the Subscriber as promptly as possible (and, in the case of (i)(A) below,
not less than five (5) days prior to such filing) and (if requested by any such
person) confirm such notice in writing no later than one (1) business day
following the day (i)(A) when a prospectus or any prospectus supplement or
post-effective amendment to the Registration Statement is filed; (B) when the
SEC notifies the Company whether there will be a "review" of such Registration
Statement and whenever the SEC comments in writing on such Registration
Statement and (C) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the SEC or any other Federal or state governmental authority for
amendments or supplements to the Registration Statement or prospectus or for
additional information; (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement covering any or all
of the Registrable Securities or the initiation of any proceedings for that
purpose; (iv) if at any time any of the representations and warranties of the
Company contained in any agreement contemplated hereby ceases to be true and
correct in all material respects; (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any proceeding for such
purpose; and (vi) of the occurrence of any event that makes any statement made
in the Registration Statement or prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration Statement, prospectus or other
documents so that, in the case of the Registration Statement or the prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

 
-9-

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(d)
Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain
the withdrawal of, (i) any order suspending the effectiveness of the
Registration Statement or (ii) any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.

 

 
(e)
If requested by the Subscriber, (i) promptly incorporate in a prospectus
supplement or post-effective amendment to the Registration Statement such
information as the Company reasonably agrees should be included therein and (ii)
make all required filings of such prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received notification of
the matters to be incorporated in such prospectus supplement or post-effective
amendment.

 

 
(f)
Furnish to the Subscriber, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent requested by
the Subscriber (including those previously furnished or incorporated by
reference) promptly after the filing of such documents with the SEC.

 

 
(g)
Promptly deliver to the Subscriber, without charge, as many copies of the
prospectus or prospectuses (including each form of prospectus) and each
amendment or supplement thereto as the Subscriber may reasonably request; and
the Company hereby consents to the use of such prospectus and each amendment or
supplement thereto by the Subscriber in connection with the offering and sale of
the Registrable Securities covered by such prospectus and any amendment or
supplement thereto.

 

 
(h)
Prior to any public offering of the Registrable Securities, use its reasonable
best efforts to register or qualify or cooperate with the Subscriber in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as the Subscriber requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to use commercially reasonable efforts to enable the disposition in such
jurisdictions of the Registrable Securities covered by a Registration Statement;
provided, however, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so subject.

 

 
(i)
Cooperate with the Subscriber to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold pursuant to a
Registration Statement, which certificates shall be free of all restrictive
legends (provided that the issuance of such unlegended certificates is in
compliance with applicable securities laws), and to enable such Registrable
Securities to be in such denominations and registered in such names as the
Subscriber may request in writing at least two (2) business days prior to any
sale of Registrable Securities.

 
-10-

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(j)
Upon the occurrence of any event contemplated by Section 13.1(c)(vi), as
promptly as possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

 

 
(k)
Use its reasonable best efforts to cause all Registrable Securities relating to
the Registration Statement to continue to be listed on the OTC Bulletin Board or
any other securities exchange, quotation system or market, if any, on which
similar securities issued by the Company are then listed or traded.

 

 
(l)
Comply in all material respects with all applicable rules and regulations of the
SEC and make generally available to its security holders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
not later than 45 days after the end of any 12-month period (or 90 days after
the end of any 12-month period if such period is a fiscal year) or such extended
period as is permitted under the Securities Act commencing on the first day of
the first fiscal quarter of the Company after the effective date of the
Registration Statement, which statement shall conform to the requirements of
Rule 158.

 

 
(m)
The Company may require the Subscriber to furnish to the Company information
regarding itself and the distribution of such Registrable Securities as is
required by law to be disclosed in the Registration Statement, and the Company
may exclude from such registration the Registrable Securities of the Subscriber
if it unreasonably fails to furnish such information within a reasonable time
after receiving such request.

 

 
(n)
If the Registration Statement refers to the Subscriber by name or otherwise as
the holder of any securities of the Company, then the Subscriber shall have the
right to require (if such reference to the Subscriber by name or otherwise is
not required by the Securities Act or any similar federal statute then in force)
the deletion of the reference to such Holder in any amendment or supplement to
the Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.

 

 
(o)
The Subscriber covenants and agrees that (i) it will not sell any Registrable
Securities under the Registration Statement until it has received copies of the
prospectus as then amended or supplemented as contemplated in Section 13.1(g)
and notice from the Company that such Registration Statement and any
post-effective amendments thereto have become effective as contemplated by
Section 13.1(c) and (ii) it and its officers, directors or Affiliates, if any,
will comply with the prospectus delivery requirements of the Securities Act as
applicable to them in connection with sales of Registrable Securities pursuant
to the Registration Statement.

 

 
(p)
The Subscriber agrees by its acquisition of such Registrable Securities that,
upon receipt of a notice from the Company of the occurrence of any event of the
kind described in Section 13.1(c)(ii), 13.1(c)(iii), 13.1(c)(iv), 13.1(c)(v),
13.1(c)(vi) or 13.1(q), the Subscriber will forthwith discontinue disposition of
such Registrable Securities under the Registration Statement until the
Subscriber's receipt of the copies of the supplemented prospectus and/or amended
Registration Statement contemplated by Section 13.1(j), or until it is advised
in writing (the "Advice") by the Company that the use of the applicable
prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such prospectus or Registration Statement.

-11-

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(q)
If (i) there is material non-public information regarding the Company which the
Company's Board of Directors (the "Board") reasonably determines not to be in
the Company's best interest to disclose and which the Company is not otherwise
required to disclose, or (ii) there is a significant business opportunity
(including, but not limited to, the acquisition or disposition of assets (other
than in the ordinary course of business) or any merger, consolidation, tender
offer or other similar transaction) available to the Company which the Board
reasonably determines not to be in the Company's best interest to disclose, then
the Company may (x) postpone or suspend filing of a registration statement for a
period not to exceed 30 consecutive days or (y) postpone or suspend
effectiveness of a registration statement for a period not to exceed 20
consecutive days; provided that the Company may not postpone or suspend
effectiveness of a registration statement under this Section 13.1(q) for more
than 45 days in the aggregate during any 360 day period; provided, however, that
no such postponement or suspension shall be permitted for consecutive 20 day
periods arising out of the same set of facts, circumstances or transactions.

 
13.2 Registration Expenses.

All fees and expenses incident to the performance of or compliance with this
Agreement by the Company, except as and to the extent specified in this Section
13.2, shall be borne by the Company whether or not the Registration Statement is
filed or becomes effective and whether or not any Registrable Securities are
sold pursuant to the Registration Statement. The fees and expenses referred to
in the foregoing sentence shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses
(A) with respect to filings required to be made with any securities exchange or
market on which Registrable Securities are required hereunder to be listed, (B)
with respect to filing fees required to be paid to the FINRA and the FINRA
Regulation, Inc. and (C) in compliance with state securities or Blue Sky laws
(including, without limitation, fees and disbursements of counsel for the
Subscriber in connection with Blue Sky qualifications of the Registrable
Securities and determination of the eligibility of the Registrable Securities
for investment under the laws of such jurisdictions as the Subscriber may
designate)), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is requested by the Subscriber), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company, (v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement, including, without limitation, the Company's independent public
accountants (including the expenses of any comfort letters or costs associated
with the delivery by independent public accountants of a comfort letter or
comfort letters). In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.
 

14.
Indemnification.

 
14.1 Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless the Subscriber, the
officers, directors, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to
perform under a margin call of Common Stock), investment and other advisors and
employees of the Subscriber, each person who controls the Subscriber (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, agents and employees of each such controlling
person, to the fullest extent permitted by applicable law, from and against any
and all losses, claims, damages, liabilities, costs (including, without
limitation, costs of preparation and attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of or relating to any untrue
or alleged untrue statement of a material fact contained in the Registration
Statement, any prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
prospectus or form of prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that (i) such untrue statements or omissions are based
solely upon information regarding the Subscriber furnished in writing to the
Company by or on behalf of the Subscriber expressly for use therein, and (ii)
that the foregoing indemnity agreement is subject to the condition that, insofar
as it relates to any untrue statement, allegedly untrue statement, omission or
alleged omission made in any preliminary prospectus but eliminated or remedied
in the final prospectus (filed pursuant to Rule 424 of the Securities Act), such
indemnity agreement shall not inure to the benefit of the Subscriber or any
underwriter, broker or other person acting on behalf of holders of the
Registrable Securities, from whom the person asserting any loss, claim, damage,
liability or expense purchased the Registrable Securities which are the subject
thereof, if a copy of such final prospectus had been made available to such
person and the Subscriber or such underwriter, broker or other person acting on
behalf of the Subscriber and such final prospectus was not delivered to such
person with or prior to the written confirmation of the sale of such Registrable
Securities to such person. The Company shall notify the Subscriber promptly of
the claim, threat or assertion of any proceeding of which the Company is aware
in connection with the transactions contemplated by this Agreement.
 
-12-

--------------------------------------------------------------------------------

 
14.2 Indemnification by Subscriber. The Subscriber shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents and employees of such controlling persons, to the
fullest extent permitted by applicable law, from and against all Losses (as
determined by a court of competent jurisdiction in a final judgment not subject
to appeal or review), as incurred, arising solely out of or based solely upon
any untrue statement of a material fact contained in the Registration Statement,
any prospectus, or any form of prospectus, or arising solely out of or based
solely upon any omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any prospectus or form
of prospectus or supplement thereto, in the light of the circumstances under
which they were made) not misleading, to the extent, but only to the extent,
that such untrue statement or omission is contained in any information so
furnished in writing by the Subscriber to the Company specifically for inclusion
in the Registration Statement or such prospectus. Notwithstanding anything to
the contrary contained herein, the Subscriber shall be liable under this Section
14.2 for only that amount as does not exceed the lesser of (i) the dollar amount
of the net proceeds received by the Subscriber upon the sale of the Registrable
Securities giving rise to such indemnification obligation and (ii) the aggregate
purchase price paid by the Subscriber for the Securities pursuant to this
Agreement.

 
14.3 Contribution. If a claim for indemnification under Section 14.1 or 14.2 is
unavailable to an indemnified party because of a failure or refusal of a
governmental authority to enforce such indemnification in accordance with its
terms (by reason of public policy or otherwise), then each indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other from
the offering of the Registrable Securities. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing sentence but
also the relative fault, as applicable, of the indemnifying party and
indemnified party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such indemnifying party or indemnified party, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include any
reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with (i) any proceeding to the extent such party would have
been indemnified for such fees or expenses if the indemnification provided for
in this Section was available to such party in accordance with its terms or (ii)
enforcing any rights under this Section 14. In no event shall the Subscriber be
required to contribute an amount under this Section 14.3 in excess of the net
proceeds received by the Subscriber upon sale of the Subscriber’s Registrable
Securities pursuant to the Registration Statement giving rise to such
contribution obligation.

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 14.3 were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
 
-13-

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The indemnity and contribution agreements contained in this Section are in
addition to any liability that the indemnifying parties may have to the
indemnified parties. Notwithstanding anything to the contrary contained herein,
the Subscriber shall be liable under this Section 14.3 for only that amount as
does not exceed the net proceeds to the Subscriber as a result of the sale of
Registrable Securities pursuant to such Registration Statement.
 
15.
Rule 144.

 
As long as the Subscriber owns any Registrable Securities, the Company covenants
to timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after
the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act. As long
as the Subscriber owns any Registrable Securities, if the Company is not
required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act,
it will prepare and furnish to the Subscriber and make publicly available in
accordance with Rule 144 promulgated under the Securities Act annual and
quarterly financial statements, together with a discussion and analysis of such
financial statements in form and substance substantially similar to those that
would otherwise be required to be included in reports required by Section 13(a)
or 15(d) of the Exchange Act, as well as any other information required thereby,
in the time period that such filings would have been required to have been made
under the Exchange Act. The Company further covenants that it will take such
further action as the Subscriber may reasonably request in writing, all to the
extent required from time to time to enable the Subscriber to sell the
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, including providing any legal opinions relating to such sale
pursuant to Rule 144.
 
16.
Governing Law

 
16.1 This Subscription Agreement is governed by the laws of the State of Nevada
and the federal laws of the United States applicable therein.
 
17.
Survival

 
17.1 This Subscription Agreement, including without limitation the
representations, warranties and covenants contained herein, shall survive and
continue in full force and effect and be binding upon the parties hereto
notwithstanding the completion of the purchase of the Securities by the
Subscriber pursuant hereto.
 
18.
Assignment

 
18.1 This Subscription Agreement is not transferable or assignable.
 
19.
Severability

 
19.1 The invalidity or unenforceability of any particular provision of this
Subscription Agreement shall not affect or limit the validity or enforceability
of the remaining provisions of this Subscription Agreement.
 
20.
Entire Agreement

 
20.1 Except as expressly provided in this Subscription Agreement and in the
agreements, instruments and other documents contemplated or provided for herein,
this Subscription Agreement contains the entire agreement between the parties
with respect to the sale of the Securities and there are no other terms,
conditions, representations or warranties, whether expressed, implied, oral or
written, by statute or common law, by the Company or by anyone else.
 
-14-

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21.
Notices

 
21.1 All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Subscriber shall be directed to the
address on the signature page of this Subscription Agreement and notices to the
Company shall be directed to it at Skins Inc., 1115 Broadway, 12th Floor, New
York, NY 10010, Attention: Mark Klein, Chief Executive Officer.
 
22.
Counterparts and Electronic Means

 
22.1 This Subscription Agreement may be executed in any number of counterparts,
each of which, when so executed and delivered, shall constitute an original and
all of which together shall constitute one instrument. Delivery of an executed
copy of this Subscription Agreement by electronic facsimile transmission or
other means of electronic communication capable of producing a printed copy will
be deemed to be execution and delivery of this Subscription Agreement as of the
date hereinafter set forth.
 
-15-

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23.
Delivery Instructions

23.1 The Subscriber hereby directs the Company to deliver the Share Certificates
and the Warrant Certificates to:
 

--------------------------------------------------------------------------------

(name)
 

--------------------------------------------------------------------------------

(address)

23.2 The Subscriber hereby directs the Company to cause the Shares and the
Warrants to be registered on the books of the Company as follows:
 

--------------------------------------------------------------------------------

(name)
 

--------------------------------------------------------------------------------

(address)

23.3 The undersigned hereby acknowledges that it will deliver to the Company all
such additional completed forms in respect of the Subscriber’s purchase of the
Securities as may be required for filing with the appropriate securities
commissions and regulatory authorities.
 
IN WITNESS WHEREOF the Subscriber has duly executed this Subscription Agreement
as of the date of acceptance by the Company.

               

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(Name of Subscriber - Please type or print)                  

--------------------------------------------------------------------------------

(Signature and, if applicable, Office)                      

--------------------------------------------------------------------------------

(Address of Subscriber)                      

--------------------------------------------------------------------------------

(City, State or Province, Postal Code of
Subscriber)
                     

--------------------------------------------------------------------------------

(Country of Subscriber)

 
-16-

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ACCEPTANCE
 
The above-mentioned Subscription Agreement in respect of the Units is hereby
accepted by Skins Inc.
 
DATED at New York, New York, United States of America, the 9th day of April,
2008.
 
 
SKINS INC.
 
 
Per:  

--------------------------------------------------------------------------------

Mark Klein
Chief Executive Officer
 

--------------------------------------------------------------------------------

 
EXHIBIT A TO THE SUBSCRIPTION AGREEMENT
 
THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES INTO WHICH THIS SECURITY IS
CONVERTIBLE HAVE BEEN OFFERED IN A TRANSACTION TO AN ACCREDITED INVESTOR
PURSUANT TO REGULATION D UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “1933 ACT”).
 
NONE OF THE SECURITIES REPRESENTED HEREBY OR THE SECURITIES INTO WHICH THIS
SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S.
STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD,
DIRECTLY OR INDIRECTLY EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THE 1933 ACT,
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933
ACT.

THESE WARRANTS WILL EXPIRE AND BECOME NULL AND VOID
AT 5:00 P.M. (EASTERN STANDARD TIME) ON APRIL 9, 2010.
 
SHARE PURCHASE WARRANTS
TO PURCHASE SHARES OF COMMON STOCK

Skins Inc.
 
incorporated in the State of Nevada
 
THIS IS TO CERTIFY THAT _____________________, (the “Holder”) of
________________, has the right to purchase, upon and subject to the terms and
conditions hereinafter referred to, up to _______________ fully paid and
non-assessable common shares (the “Shares”) in the capital of Skins Inc.
(hereinafter called the “Company”) on or before 5:00 p.m. (Eastern Standard
Time) on the date which is twenty four (24) months from the date of issue of
this Warrant as set forth above (the “Expiry Date”) at a price per Share (the
“Exercise Price”) of US$0.40 on the terms and conditions attached hereto as
Appendix “A” (the “Terms and Conditions”).
 

 
1.
ONE (1) WARRANT AND THE EXERCISE PRICE ARE REQUIRED TO PURCHASE ONE SHARE. THIS
CERTIFICATE REPRESENTS __________________ WARRANTS.

 

 
2.
These Warrants are issued subject to the Terms and Conditions, and the Warrant
Holder may exercise the right to purchase Shares only in accordance with those
Terms and Conditions.

 

 
3.
Nothing contained herein or in the Terms and Conditions will confer any right
upon the Holder hereof or any other person to subscribe for or purchase any
Shares at any time subsequent to the Expiry Date, and from and after such time,
this Warrant and all rights hereunder will be void and of no value.

 
IN WITNESS WHEREOF the Company has executed this Warrant Certificate this 9th
day of April, 2008.
 
 
SKINS INC.
 
 
Per: 

--------------------------------------------------------------------------------

Mark Klein, Chief Executive Officer
 

--------------------------------------------------------------------------------

 
PLEASE NOTE THAT ALL SHARE CERTIFICATES MUST BE LEGENDED AS FOLLOWS DURING THE
CURRENCY OF APPLICABLE HOLD PERIODS:
 
THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES INTO WHICH THIS SECURITY IS
CONVERTIBLE HAVE BEEN OFFERED IN A TRANSACTION TO AN ACCREDITED INVESTOR
PURSUANT TO REGULATION D UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “1933 ACT”).
 
NONE OF THE SECURITIES REPRESENTED HEREBY OR THE SECURITIES INTO WHICH THIS
SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S.
STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD,
DIRECTLY OR INDIRECTLY EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THE 1933 ACT,
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933
ACT.
 
-2-

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APPENDIX “A”

TERMS AND CONDITIONS dated April 9, 2008, attached to the Warrants issued by
Skins Inc.

 
1.
INTERPRETATION

 
1.1 Definitions
 
In these Terms and Conditions, unless there is something in the subject matter
or context inconsistent therewith:
 

 
(a)
“Company” means Skins Inc. until a successor corporation will have become such
as a result of consolidation, amalgamation or merger with or into any other
corporation or corporations, or as a result of the conveyance or transfer of all
or substantially all of the properties and estates of the Company as an entirety
to any other corporation and thereafter “Company” will mean such successor
corporation;

 

 
(b)
“Company’s Auditors” means an independent firm of accountants duly appointed as
auditors of the Company;

 

 
(c)
“Director” means a director of the Company for the time being, and reference,
without more, to action by the directors means action by the directors of the
Company as a Board, or whenever duly empowered, action by an executive committee
of the Board;

 

 
(d)
“herein”, “hereby” and similar expressions refer to these Terms and Conditions
as the same may be amended or modified from time to time; and the expression
“Article” and “Section,” followed by a number refer to the specified Article or
Section of these Terms and Conditions;

 

 
(e)
“person” means an individual, corporation, partnership, trustee or any
unincorporated organization and words importing persons have a similar meaning;

 

 
(f)
“shares” means the common shares in the capital of the Company as constituted at
the date hereof and any shares resulting from any subdivision or consolidation
of the shares;

 

 
(g)
“Warrant Holders” or “Holders” means the holders of the Warrants; and

 

 
(h)
“Warrants” means the warrants of the Company issued and presently authorized and
for the time being outstanding.

 
1.2 Gender
 
Words importing the singular number include the plural and vice versa and words
importing the masculine gender include the feminine and neuter genders.
 
1.3 Interpretation not affected by Headings
 
The division of these Terms and Conditions into Articles and Sections, and the
insertion of headings are for convenience of reference only and will not affect
the construction or interpretation thereof.
 
1.4 Applicable Law
 
The Warrants will be construed in accordance with the laws of the State of
Nevada and the federal law of the United States applicable therein.
 

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2.
ISSUE OF WARRANTS

 
2.1 Additional Warrants
 
The Company may at any time and from time to time issue additional warrants or
grant options or similar rights to purchase shares of its capital stock.
 
2.2 Warrants to Rank Pari Passu
 
All Warrants and additional warrants, options or similar rights to purchase
shares from time to time issued or granted by the Company, will rank pari passu
whatever may be the actual dates of issue or grant thereof, or of the dates of
the certificates by which they are evidenced.
 
2.3 Issue in substitution for Lost Warrants
 

 
(a)
In case a Warrant becomes mutilated, lost, destroyed or stolen, the Company, at
its discretion, may issue and deliver a new Warrant of like date and tenor as
the one mutilated, lost, destroyed or stolen, in exchange for and in place of
and upon cancellation of such mutilated Warrant, or in lieu of, and in
substitution for such lost, destroyed or stolen Warrant and the substituted
Warrant will be entitled to the benefit hereof and rank equally in accordance
with its terms with all other Warrants issued or to be issued by the Company.

 

 
(b)
The applicant for the issue of a new Warrant pursuant hereto will bear the cost
of the issue thereof and in case of loss, destruction or theft furnish to the
Company such evidence of ownership and of loss, destruction, or theft of the
Warrant so lost, destroyed or stolen as will be satisfactory to the Company in
its discretion and such applicant may also be required to furnish indemnity in
amount and form satisfactory to the Company in its discretion, and will pay the
reasonable charges of the Company in connection therewith.

 
2.4 Warrant Holder Not a Shareholder
 
The holding of a Warrant will not constitute the Holder thereof a shareholder of
the Company, nor entitle him to any right or interest in respect thereof except
as in the Warrant expressly provided.
 
3.
NOTICE

 
3.1 Notice to Warrant Holders
 
Any notice required or permitted to be given to the Holders will be in writing
and may be given by prepaid registered post, electronic facsimile transmission
or other means of electronic communication capable of producing a printed copy
to the address of the Holder appearing on the Holder’s Warrant or to such other
address as any Holder may specify by notice in writing to the Company, and any
such notice will be deemed to have been given and received by the Holder to whom
it was addressed if mailed, on the third day following the mailing thereof, if
by facsimile or other electronic communication, on successful transmission, or,
if delivered, on delivery; but if at the time or mailing or between the time of
mailing and the third business day thereafter there is a strike, lockout, or
other labour disturbance affecting postal service, then the notice will not be
effectively given until actually delivered.
 
3.2 Notice to the Company
 
Any notice required or permitted to be given to the Company will be in writing
and may be given by prepaid registered post, electronic facsimile transmission
or other means of electronic communication capable of producing a printed copy
to the address of the Company set forth below or such other address as the
Company may specify by notice in writing to the Holder, and any such notice will
be deemed to have been given and received by the Company to whom it was
addressed if mailed, on the third day following the mailing thereof, if by
facsimile or other electronic communication, on successful transmission, or, if
delivered, on delivery; but if at the time or mailing or between the time of
mailing and the third business day thereafter there is a strike, lockout, or
other labour disturbance affecting postal service, then the notice will not be
effectively given until actually delivered:
 
Skins Inc.
1115 Broadway, 12th Floor
New York, NY 10010
Attention: Mark Klein, Chief Executive Officer
 
Fax No. (212) 656-1788
 
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with a copy, which shall not constitute notice, to:
 
Kirkpatrick & Lockhart Preston Gates Ellis LLP
10100 Santa Monica Boulevard, 7th Floor
Los Angeles, CA 90067
 
Attention: Anh Q. Tran, Esq.

 
Fax: (310) 552-5001
 
4.
EXERCISE OF WARRANTS

 
4.1 Method of Exercise of Warrants
 
The right to purchase shares conferred by the Warrants may be exercised by the
Holder surrendering the Warrant Certificate representing same, with a duly
completed and executed subscription in the form attached hereto and a bank draft
or certified cheque payable to the Company for the purchase price applicable at
the time of surrender in respect of the shares subscribed for in lawful money of
the United States of America, to the Company at the address set forth in, or
from time to time specified by the Company pursuant to, Section 3.2.
 
4.2 Effect of Exercise of Warrants
 

 
(a)
Upon surrender and payment as aforesaid the shares so subscribed for will be
deemed to have been issued and such person or persons will be deemed to have
become the Holder or Holders of record of such shares on the date of such
surrender and payment, and such shares will be issued at the subscription price
in effect on the date of such surrender and payment.

 

 
(b)
Within ten business days after surrender and payment as aforesaid, the Company
will forthwith cause to be delivered to the person or persons in whose name or
names the shares so subscribed for are to be issued as specified in such
subscription or mailed to him or them at his or their respective addresses
specified in such subscription, a certificate or certificates for the
appropriate number of shares not exceeding those which the Warrant Holder is
entitled to purchase pursuant to the Warrant surrendered.

 
4.3 Subscription for Less Than Entitlement
 
The Holder of any Warrant may subscribe for and purchase a number of shares less
than the number which he is entitled to purchase pursuant to the surrendered
Warrant. In the event of any purchase of a number of shares less than the number
which can be purchased pursuant to a Warrant, the Holder thereof upon exercise
thereof will in addition be entitled to receive a new Warrant in respect of the
balance of the shares which he was entitled to purchase pursuant to the
surrendered Warrant and which were not then purchased.
 
4.4 Warrants for Fractions of Shares
 
To the extent that the Holder of any Warrant is entitled to receive on the
exercise or partial exercise thereof a fraction of a share, such right may be
exercised in respect of such fraction only in combination with another Warrant
or other Warrants which in the aggregate entitle the Holder to receive a whole
number of such shares.
 
4.5 Expiration of Warrants
 
After the expiration of the period within which a Warrant is exercisable, all
rights thereunder will wholly cease and terminate and such Warrant will be void
and of no effect.
 
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4.6 Time of Essence
 
Time will be of the essence hereof.
 
4.7 Subscription Price
 
Each Warrant is exercisable at a price per share (the “Exercise Price”) of Forty
Cents (US$0.40). One (1) Warrant and the Exercise Price are required to
subscribe for each share during the term of the Warrants.
 
4.8 Adjustment of Exercise Price
 

 
(a)
The Exercise Price and the number of shares deliverable upon the exercise of the
Warrants will be subject to adjustment in the event and in the manner following:

 

 
(i)
If and whenever the shares at any time outstanding are subdivided into a greater
or consolidated into a lesser number of shares the Exercise Price will be
decreased or increased proportionately as the case may be; upon any such
subdivision or consolidation the number of shares deliverable upon the exercise
of the Warrants will be increased or decreased proportionately as the case may
be.

 

 
(ii)
In case of any capital reorganization or of any reclassification of the capital
of the Company or in the case of the consolidation, merger or amalgamation of
the Company with or into any other Company (hereinafter collectively referred to
as a “Reorganization”), each Warrant will after such Reorganization confer the
right to purchase the number of shares or other securities of the Company (or of
the Company’s resulting from such Reorganization) which the Warrant Holder would
have been entitled to upon Reorganization if the Warrant Holder had been a
shareholder at the time of such Reorganization.

 
In any such case, if necessary, appropriate adjustments will be made in the
application of the provisions of this Article Four relating to the rights and
interest thereafter of the Holders of the Warrants so that the provisions of
this Article Four will be made applicable as nearly as reasonably possible to
any shares or other securities deliverable after the Reorganization on the
exercise of the Warrants.
 
The subdivision or consolidation of shares at any time outstanding into a
greater or lesser number of shares (whether with or without par value) will not
be deemed to be a Reorganization for the purposes of this clause 4.8(a)(ii).
 

 
(b)
The adjustments provided for in this Section 4.8 are cumulative and will become
effective immediately after the record date or, if no record date is fixed, the
effective date of the event which results in such adjustments.

 
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4.9 Determination of Adjustments
 
If any questions will at any time arise with respect to the Exercise Price or
any adjustment provided for in Section 4.8, such questions will be conclusively
determined by the Company’s Auditors, or, if they decline to so act any other
firm of certified public accountants in the United States of America that the
Company may designate and who will have access to all appropriate records and
such determination will be binding upon the Company and the Holders of the
Warrants.
 
5.
RESERVED

 
6.
MODIFICATION OF TERMS, MERGER, SUCCESSORS

 
6.1 Modification of Terms and Conditions for Certain Purposes
 
From time to time the Company may, subject to the provisions of these presents,
modify the Terms and Conditions hereof, for the purpose of correction or
rectification of any ambiguities, defective provisions, errors or omissions
herein, in each such case, only with the Subscriber's prior written consent.
 
6.2 Warrants Not Transferable
 
The Warrant and all rights attached to it are not transferable.
 
DATED as of the date first above written in these Terms and Conditions.
 

        SKINS INC.  
   
   
  By:    

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Authorized Signatory

 
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[FORM OF NOTICE OF EXERCISE OF WARRANT]
 
NOTICE OF EXERCISE OF WARRANT
 
(To be executed upon exercise of Warrant)
 
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
securities of Skins Inc., as provided for therein, and tenders herewith payment
of the exercise price in full in the form of cash or a certified or official
bank check in same-day funds in the amount of $____________ for _________ such
securities.
 
Please issue a certificate or certificates for such securities in the name of
(please print name, address and social security number):
 
Name: 
 

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Address: 
 

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SSN/EIN:  
 

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Signature: 
 

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Title (if applicable):  
 

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Date:  
 

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Note: The above signature should correspond exactly with the name on the first
page of this Warrant Certificate.
 
If said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder rounded up to the next higher whole number of shares.
 

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EXHIBIT B TO THE SUBSCRIPTION AGREEMENT
 
LIST OF SECURITIES TO BE REGISTERED
 
The registration statement shall cover 13,503,225 shares of the common stock of
Skins Inc. and 13,503,225 shares of common stock that may be issued upon the
exercise of warrants (the “Registrable Securities”) issued in this offering
exempt from registration under the 1933 Act and a total of 1,602,274 shares
issued to bridge note holders.

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