Document:

Unassociated Document

    Exhibit
4.1

    

    NEITHER
THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), AND MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.

    

    THE
TRANSFERABILITY OF THIS WARRANT IS

    RESTRICTED
AS PROVIDED IN SECTION 3

    

    
      	
              No.
      _____________

            	 
      	
              ____________,
      2010

            

    

    

    SKINNY
NUTRITIONAL CORP.

    REDEEMABLE
COMMON STOCK PURCHASE WARRANT

    

              For
good and valuable consideration, the receipt of which is hereby acknowledged by
SKINNY NUTRITIONAL CORP., a Nevada corporation (the “Company”),
_____________________________ (the “Holder”), is hereby
granted the right to purchase, at any time from and after the date that this
Warrant is issued as specified above, until 5:00 P.M., New York City time, on
______________, 201_ [24 months from
date of issuance] (the “Warrant Exercise
Term”), up to ______________________________ (________) fully-paid and
non-assessable shares of the Company’s Common Stock, $.001 par value per share
(“Common
Stock”).

    

    l.       
    Exercise of
Warrant

    

    1.1             During
the Warrant Exercise Term, this Warrant shall be exercisable at a per share
price of $0.10 (the “Exercise Price”),
subject to adjustment as provided in Section 2 hereof, payable in cash or by
certified or official bank check in New York Clearing House funds. Upon
surrender of a copy of this warrant certificate along with a copy of the annexed
Exercise Notice duly executed, together with payment of the Exercise Price for
the shares of Common Stock purchased at the Company’s principal executive
offices the registered Holder of the Warrant shall be entitled to receive a
certificate or certificates for the shares of Common Stock so purchased (the
“Warrant
Shares”). The purchase rights represented by this Warrant are exercisable
at the option of the Holder hereof, in whole or in part (but not as to
fractional shares of the Common Stock) during any period in which this Warrant
may be exercised as set forth above. Notwithstanding anything herein to the
contrary, the Holder shall not be required to physically surrender this Warrant
to the Company until the Holder has purchased all of the Warrant Shares
available hereunder and the Warrant has been exercised in full, in which case,
the Holder shall surrender this Warrant to the Company for cancellation within
two (2) business days of the when the final Exercise Notice is delivered to the
Company.  Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased.  The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such purchases. At the
Holder’s request following any partial exercise of this Warrant, upon surrender
of the original of this Warrant, the Company shall cancel this Warrant and
execute and deliver a new Warrant of like tenor for the balance of the Warrants
Shares that remain purchasable hereunder following such partial
exercise.  In the event of any dispute or discrepancy, the records of
the Company shall be controlling and determinative in the absence of manifest
error. The Holder and any
assignee, by acceptance of this Warrant, acknowledge and agree that, by reason
of the provisions of this paragraph, following the purchase of a portion of the
Warrant Shares hereunder, the number of Warrant Shares available for purchase
hereunder at any given time may be less than the amount stated on the face
hereof.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    1.2             The
issuance of certificates for shares of Common Stock upon the exercise of this
Warrant shall be made without charge to the Holder hereof including, without
limitation, any tax which may be payable in respect of the issuance thereof, and
such certificates shall be issued in the name of, or in such names as may be
directed by, the Holder hereof; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of such certificate in a name other than that of
the Holder and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been
paid.

    

    1.3            
The Company covenants that it will at all times reserve and keep available out
of its authorized Common Stock, solely for the purpose of issuance upon exercise
of this Warrant as herein provided, such number of shares of Common Stock as
shall then be issuable upon the exercise of this Warrant.  The Company
covenants that all shares of Common Stock which shall be so issuable shall be
duly and validly issued and fully-paid and non-assessable.

    

    1.4           
 Each exercise of this Warrant by the Holder shall be deemed to have been
effected immediately prior to the close of business on the date upon which all
of the requirements of  Section 1 hereof with respect to such exercise
shall have been complied with in full (each such date, an “Exercise
Date”).  On the applicable Exercise Date with respect to any
exercise of this Warrant by the Holder, the Company shall be deemed to have
issued to the Holder, and the Holder shall be deemed to have become the holder
of record and legal owner of, the number of Warrant Shares being purchased upon
such exercise of this Warrant, notwithstanding that the stock transfer books of
the Company shall then be closed or that certificates representing such number
of Warrant Shares being purchased shall not then be actually delivered to the
Holder. The Company shall instruct its stock transfer agent to deliver the
Warrant Shares to the Holder’s designated account within three business days
from the Exercise Date.

    

    2.     
      Adjustments and
Extraordinary Events

    

    2.1           
 Stock Dividends,
Subdivisions, Reclassifications or Combinations.  If the
Corporation shall (A) declare a dividend or make a distribution on its Common
Stock in shares of its Common Stock, (B) subdivide or reclassify the outstanding
shares of Common Stock into a greater number of shares, or (C) combine or
reclassify the outstanding Common Stock into a smaller number of shares, the
Exercise Price in effect at the time of the record date for such dividend or
distribution or the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted. Any adjustment made herein
which results in a decrease (or increase) in the Exercise Price shall also
effect a proportional increase (or decrease) in the number of shares of Common
Stock into which this Warrant is exercisable. Successive adjustments in the
Exercise Price shall be made whenever any event specified above shall
occur.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    2.2     
       Reorganization, Reclassification,
Merger, Consolidation or Disposition of Assets. In case the Company shall
reorganize its capital, reclassify its capital stock, consolidate or merge with
or into another corporation (where the Company is not the surviving corporation
or where there is a change in or distribution with respect to the Common Stock
of the Company), or sell, transfer or otherwise dispose all or substantially all
of its property, assets or business to another corporation and, pursuant to the
terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the successor or acquiring
corporation, or any cash, shares of stock or other securities or property of any
nature whatsoever (including warrants or other subscription or purchase rights)
in addition to or in lieu of common stock of the successor or acquiring
corporation (“Other
Property”), are to be received by or distributed to the holders of Common
Stock of the Company, then the Holder shall have the right thereafter to
receive, upon exercise 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 Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a Holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets (“Extraordinary
Transaction”), the successor or acquiring corporation (if other than the
Company) shall expressly assume the due and punctual observance and performance
of each and every covenant and condition of this Warrant to be performed and
observed by the Company and all the obligations and liabilities hereunder,
subject to such modifications as may be deemed appropriate (as determined in
good faith by resolution of the Board of Directors of the Company) in order to
provide for adjustments of Warrant Shares for which this Warrant is exercisable
which shall be as nearly equivalent as practicable to the adjustments provided
for in this Section
2.2.  As soon as commercially practicable following the
Extraordinary Transaction, the successor or acquiring corporation (if other than
the Company), shall deliver to Holder a new warrant in repacement of this
Warrant consistent with the provisions referenced in the immediately preceding
sentence against receipt by such successor or acquiring corporation of the
original of this Warrant.  For purposes of this Section 2.2, “common
stock of the successor or acquiring corporation” shall include stock of such
corporation of any class which is not preferred as to dividends or assets over
any other class of stock of such corporation and which is not subject to
redemption and shall also include any evidences of indebtedness, shares of stock
or other securities which are convertible into or exchangeable for any such
stock, either immediately or upon the arrival of a specified date or the
happening of a specified event and any warrants or other rights to subscribe for
or purchase any such stock.  The foregoing provisions of this Section 2.2 shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.

    

    2.3           Notice of Adjustment.
Whenever the number of Warrant Shares or number or kind of securities or other
property purchasable upon the exercise of this Warrant or the Exercise Price is
adjusted, as herein provided, the Company shall give prior written notice
thereof to the Holder of at least 15 days prior to the date on which the Company
closes its books or takes a record for determining the particular event, which
notice shall state the number of Warrant Shares (and other securities or
property) purchasable upon the exercise of this Warrant and the Exercise Price
of such Warrant Shares (and other securities or property) after such adjustment,
setting forth a brief statement of the facts requiring such adjustment and
setting forth the computation by which such adjustment was made.

    

    3.      
     Restrictions on
Transfer

    

    3.1           The
Holder acknowledges that he has been advised by the Company that this Warrant
and the Warrant Shares issuable upon exercise thereof (collectively the “Securities”) have not
been registered under the Securities Act of 1933, as amended (the “Securities Act”),
that the Warrant is being issued, and the shares issuable upon exercise of the
Warrant will be issued, on the basis of the statutory exemption provided by
section 4(2) of the Securities Act relating to transactions by an issuer not
involving any public offering, and that the Company's reliance upon this
statutory exemption is based in part upon the representations made by the Holder
contained herein.  The Holder acknowledges that he has been informed
by the Company of, or is otherwise familiar with, the nature of the limitations
imposed by the Securities Act and the rules and regulations thereunder on the
transfer of securities. In particular, the Holder agrees that no sale,
assignment or transfer of the Securities shall be valid or effective, and the
Company shall not be required to give any effect to any such sale, assignment or
transfer, unless (i) the sale, assignment or transfer of the Securities is
registered under the Securities Act or (ii) the Securities are sold, assigned or
transferred in accordance with all the requirements and limitations of Rule 144
under the Securities Act or such sale, assignment, or transfer is otherwise
exempt from registration under the Securities Act. The Holder represents and
warrants that he has acquired this Warrant and will acquire the Securities for
his own account for investment and not with a view to the sale or distribution
thereof or the granting of any participation therein, and that he has no present
intention of distributing or selling to others any of such interest or granting
any participation therein. The Holder acknowledges that the Warrant and Warrant
Shares must be held indefinitely unless a subsequent disposition thereof is
registered under the Securities Act or registered and qualified under any
applicable state securities or “blue-sky” laws or is exempt from registration
and/or qualification. The Holder has no need for liquidity in its investment in
the Company, and is able to bear the economic risk of such investment for an
indefinite period and to afford a complete loss thereof. The Holder is an
“accredited investor” as such term is defined in Rule 501 (the provisions of
which are known to the Holder) promulgated under the Act.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    The
Holder acknowledges that the securities shall bear the following
legend:

    

    
      “These
securities have not been registered under the Securities Act of
1933.  Such securities may not be sold or offered for sale,
transferred, hypothecated or otherwise assigned in the absence of an effective
registration statement with respect thereto under such Act or an opinion of
counsel to the Company that an exemption from registration for such sale, offer,
transfer, hypothecation or other assignment is available under such
Act.”

    

    

    4.      
     Registration
Rights.  The Holder shall be entitled to all of the rights and
subject to all of the obligations regarding registration of the Warrant Shares,
as described in Section 5 of the Subscription Agreement between the Company and
the original holder hereof.

    

    5.        
   Redemption.

    

    5.1           Prior
to the expiration of the Warrant Exercise Term, the Company shall have the
option, subject to the conditions set forth herein, redeem all of the Warrants
then outstanding upon not less than thirty (30) days nor more than sixty (60)
days prior written notice to the Warrant Holders at any time, provided that the
closing price of the Company’s Common Stock for each of the twenty (20)
consecutive trading days prior to the date of the notice of redemption is at
least $0.14, as proportionately adjusted to reflect any stock splits, stock
dividends, combination of shares or like events.

    

    5.2           Notice
of redemption will be effective upon mailing in accordance with this Section and
such date may be referred to below as the “Notice Date”. Notice
of redemption shall be mailed by first class mail, postage prepaid, by the
Company not less than 30 days prior to the date fixed for redemption to the
Holders of the Warrants to be redeemed at their last addresses as they shall
appear on the registration books. Any notice mailed in the manner herein
provided shall be conclusively presumed to have been duly given whether or not
the Holder received such notice.

    

    5.3           The
notice of redemption shall state the date set for redemption, which date shall
be not less than thirty (30) days, or more than sixty (60) days, from the Notice
Date (the “Redemption
Date”). The Company shall not mail the notice of redemption unless all
funds necessary to pay for redemption of the Warrants to be redeemed shall have
first been set aside by the Company for the benefit of the Warrant Holders so as
to be and continue to be available therefor. The redemption price to be paid to
the Warrant Holders will be $0.001 for each share of Common Stock of the Company
to which the Warrant Holder would then be entitled upon exercise of the Warrant
being redeemed, as adjusted from time to time as provided herein (the “Redemption
Price”).

    

    5.4           Following
the Notice Date, the Warrant Holders may exercise their Warrants for cash in
accordance with Section 1 of this Warrant between the Notice Date and 5:00 p.m.
Eastern Time on the Redemption Date and such exercise shall be timely if the
form of election to purchase duly executed and the Warrant Exercise Price for
the shares of Common Stock to be purchased are actually received by the Company
at its principal offices prior to 5:00 p.m. Eastern Time on the Redemption
Date.

    

    5.5           If
any Warrant Holder does not wish to exercise any Warrant being redeemed, he
should mail such Warrant to the Company at its principal offices after receiving
the notice of redemption. On and after 5:00 p.m. Eastern Time on the Redemption
Date, notwithstanding that any Warrant subject to redemption shall not have been
surrendered for redemption, the obligation evidenced by all Warrants not
surrendered for redemption or effectively exercised shall be deemed no longer
outstanding, and all rights with respect thereto shall forthwith cease and
terminate, except only the right of the holder of each Warrant subject to
redemption to receive the Redemption Price for each share of Common Stock to
which he would be entitled if he exercised the Warrant upon receiving notice of
redemption of the Warrant subject to redemption held by
him.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    6. 
          Exchange and Replacement of
Warrant Certificates.

    

    This Warrant Certificate is
exchangeable without expense, upon the surrender hereof by the registered Holder
at the principal executive office of the Company, for a new Warrant Certificate
of like tenor and date representing in the aggregate the right to purchase the
same number of Warrant Shares in such denominations as shall be designated by
the Holder thereof at the time of such surrender.

    

    Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it, and reimbursement to the
Company of all reasonable expenses incidental thereto, and upon surrender and
cancellation of the Warrants, if mutilated, the Company will make and deliver a
new Warrant of like tenor, in lieu thereof and any such lost, stolen, destroyed
or mutilated warrant shall thereupon become void.

    

    7.           Elimination of Fractional
Interests.

    

    The Company shall not be required to
issue certificates representing fractions of the shares of Common Stock and
shall not be required to issue scrip or pay cash in lieu of fractional
interests, it being the intent of the parties that all fractional interests
shall be eliminated by rounding any fraction up or down to the nearest whole
number of shares of Common Stock.

    

    8.      
     Rights of Warrant
Holders.

    

    Nothing contained in this Agreement
shall be construed as conferring upon the Holder any rights whatsoever as a
stockholder of the Company, either at law or in equity, including without
limitation, or Holders the right to vote or to consent or to receive notice as a
stockholder in respect of any meetings of stockholders for the election of
directors the right to receive dividends or any other matter.

    

    9.           Miscellaneous

    

    9.1          
  All the covenants and agreements made by the Company in this Warrant
shall bind its successors and assigns. This Warrant shall be for the sole and
exclusive benefit of the Holder and nothing in this Warrant shall be construed
to confer upon any person other than the Holder any legal or equitable right,
remedy or claim hereunder.

    

    9.2            
No recourse shall be had for any claim based hereon or otherwise in any manner
in respect hereof, against any incorporator, stockholder, officer or director,
past, present or future, of the Company or of any predecessor corporation,
whether by virtue of any constitutional provision or statute or rule of law, or
by the enforcement of any assessment or penalty or in any other manner, all such
liability being expressly waived and released by the acceptance hereof and as
part of the consideration for the issue hereof.

    

    9.3           
 No course of dealing between the Company and the Holder hereof shall
operate as a waiver of any right of any Holder hereof, and no delay on the part
of the Holder in exercising any right hereunder shall so operate.

    

    9.4            
This Warrant may be amended only by a written instrument executed by the Company
and the Holder hereof.  Any amendment shall be endorsed upon this
Warrant, and all future Holders shall be bound thereby.

    

    9.5           
 All communications provided for herein shall be sent, except as may be
otherwise specifically provided, by registered or certified mail:  if
to the Holder of this Warrant, to the address shown on the books of the Company
or such other address provided to the Company by the Holder in accordance with
the terms of this Warrant; and if to the Company, to Three Bala Plaza East,
Suite 101, Bala Cynwyd, PA 19004, attention: Office of the President, or to such
other address as the Company may advise the Holder of this Warrant in
writing.  Notices shall be deemed given when mailed.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    9.6       
     The provisions of this Warrant shall in all
respects be constructed according to, and the rights and liabilities of the
parties hereto shall in all respects be governed by, the laws of the
Commonwealth of Pennsylvania. This Warrant shall be deemed a contract made under
the laws of the Commonwealth of Pennsylvania and the validity of this Warrant
and all rights and liabilities hereunder shall be determined under the laws of
said State.

    

    9.7          
  The headings of the Sections of this Warrant are inserted for
convenience only and shall not be deemed to constitute a part of this
Warrant.

    

               IN
WITNESS WHEREOF, SKINNY NUTRITIONAL CORP. has caused this Warrant to be executed
in its corporate name by its officer, and its seal to be affixed
hereto.

    

    
      
        	
                Dated:

              	
                _________________,
      2010

              
	 
      	
                Bala
      Cynwyd, Pennsylvania

              

      

    

    

    
      
        
          
            
              	 
      	
                      SKINNY
      NUTRITIONAL CORP.

                    
	 
      	 
      
	 
      	By:	
                       

                    
	 
      	
                      Name:

                    
	 
      	
                      Title:

                    

            

          

        

      

    

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    EXERCISE
NOTICE

    

    TO:         SKINNY
NUTRITIONAL CORP.

    Three Bala Plaza East, Suite
101

    Bala Cynwyd,
PA  19004

    

    The undersigned Holder hereby
irrevocably elects to exercise the right to purchase __________________ shares
of Common Stock covered by this Warrant according to the conditions hereof and
herewith makes full payment of the Exercise Price of such shares.

    

    Kindly deliver to the undersigned a
certificate representing the Shares.

    

                        INSTRUCTIONS
FOR DELIVERY

    

    Name:  ____________________________________________________________

    (please typewrite or print in block
letters)

    

    Address:
__________________________________________________________

    

    Tax I.D.
No. or Social Security No.: ____________________________________

    

    Dated:
_________________________

    

    Signature
________________________________

    

    STATE OF
___________)

    COUNTY OF
_________) ss:

    

    On this __ day of ___________, before
me personally came ________, to me known, who being by me duly sworn, did depose
and say that he resides at __________________, that he is the holder of the
foregoing instrument and that he executed such instrument and duly acknowledged
to me that he executed the same.

    

    
      
        
          	 
      	
                   

                
	 
      	
                  Notary
      Public

                

        

      

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    [FORM OF
ASSIGNMENT]

    

    (To be
executed by the registered holder if such holder

    desires
to transfer the Warrant Certificate.)

    

    FOR VALUE
RECEIVED, the undersigned Holder of this Warrant hereby sells, assigns and
transfers the foregoing Warrant and all rights evidenced thereby to

     

    
      
        
          
            
              	
                      Name:

                    	
                         

                    
	 
      	
                      (Please
      Print)

                    
	 	 
	
                      Address:

                    	
                         

                    
	 
      	
                      (Please
      Print)

                    
	 	 
	
                      Tax
      ID No.:

                    	
                         

                    

            

          

        

      

    

    

    and does
hereby irrevocably constitute and appoint                                       
, Attorney, to transfer the within Warrant Certificate on the books of
SKINNY NUTRITIONAL CORP., with full power of substitution.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	

                                    Dated:

                                  	 	 	

                                    Signature:

                                  
	 
      	 	
                                       

                                  
	 
      	 	 
      
	 
      	 	
                                       

                                  
	 
      	 	
                                    (Signature
      must conform in all respects to name of holder as specified on the face of
      the Warrant
Certificate)

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
        	
                   

              	 
      
	 
      	 
      
	
                   

              	 
      
	
                (Insert
      Social Security or Other

              	 
      
	
                Identifying
      Number of Assignee)

              	 
      

      

    

    

    STATE OF
___________)

    COUNTY OF
_________) ss:

    

    On this __ day of ___________, before
me personally came ________, to me known, who being by me duly sworn, did depose
and say that he resides at __________________, that he is the holder of the
foregoing instrument and that he executed such instrument and duly acknowledged
to me that he executed the same.

    

    
      
        	 
      	
                   

              
	 
      	
                Notary
      Public

              

      

    

     

    
      
         

      

      
        8Unassociated Document

    
      
        
          
            	 
      	 
      	 
      
	
                    Name
      of Subscriber

                  	 
      	
                    Agreement
      No.

                  

          

        

      

    

    

    CONFIDENTIAL
SUBSCRIPTION AGREEMENT

    

    SKINNY
NUTRITIONAL CORP.

    

    Private
Sale of Securities

    $250,000
Minimum - $1,500,000 Maximum

    

    Minimum
Offering Consisting of 4,166,667 Shares of Common Stock

    And
Warrants to Purchase 4,166,667 Shares of Common Stock

    

    Maximum
Offering Consisting of 25,000,000 Shares of Common Stock

    And
Warrants to Purchase 25,000,000 Shares of Common Stock

    ________________________

    

    THIS
SUBSCRIPTION AGREEMENT CONTAINS MATERIAL NONPUBLIC INFORMATION CONCERNING SKINNY
NUTRITIONAL CORP. AND IS PREPARED SOLELY FOR THE USE OF THE OFFEREE NAMED
ABOVE.  ANY USE OF THIS INFORMATION FOR ANY PURPOSE OTHER THAN IN
CONNECTION WITH THE CONSIDERATION OF AN INVESTMENT IN THE SECURITIES OFFERED
HEREBY MAY SUBJECT THE USER TO CRIMINAL AND CIVIL LIABILITY.

    

    THE
SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK AND IMMEDIATE DILUTION AND MAY BE PURCHASED ONLY BY PERSONS WHO QUALIFY AS
“ACCREDITED INVESTORS” UNDER RULE 501 (a) OF REGULATION D UNDER THE SECURITIES
ACT.

    

    THIS
DOCUMENT HAS NOT BEEN FILED WITH OR REVIEWED BY THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR ANY OTHER COMMISSION OR REGULATORY AUTHORITY, AND HAS NOT
BEEN FILED WITH OR REVIEWED BY THE ATTORNEY GENERAL OF ANY STATES NOR HAS ANY
SUCH COMMISSION, AUTHORITY OR ATTORNEY GENERAL DETERMINED WHETHER IT IS ACCURATE
OR COMPLETE OR PASSED UPON OR ENDORSED THE MERITS OF THIS
OFFERING.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

    

    Selling
Agent:

    

    

    

    PHILADEPHIA
BROKERAGE CORPORATION

    2 Radnor
Corporate Center

    100
Matsonford Road, Suite 111

    Radnor,
Pennsylvania 19087

    Tel.
(610) 975-9990

    

    April
7, 2010

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CONFIDENTIAL
SUBSCRIPTION AGREEMENT

    

    INSTRUCTIONS:

    

    Items to
be delivered by all Investors:

    

    a.           One
(1) completed and executed Subscription Agreement, including the Investor
Questionnaire.

    

    
      b.         
Payment
in the amount of subscription, by wire transfer of funds or check. All checks
should be made payable to “The Bryn Mawr Trust Company as escrow agent for
Philadelphia Brokerage Corporation and Skinny Nutritional Corp.” in the total
amount of the Securities subscribed for.

    

    

    
      c.         
Wired
funds should be directed as follows:

    

    

    The Bryn
Mawr Trust Company Escrow Account for Philadelphia Brokerage Corporation and
Skinny Nutritional Corp.

    

    Trust
Funds, Account Number 069-6964, for further credit to:

    PHL
Brokerage/SKNY, Account Number 801525000

    

    The Bryn Mawr Trust
Company

    10 Bryn Mawr Avenue

    Bryn Mawr, PA 19010

    Attention: Trust/Escrow
Administration

    ABA No.: 031908485

    

    Facsimile:  (610)
526-2076

    Telephone:  (610)
581-4754

    

    THE SUBSCRIBER IS RESPONSIBLE FOR ALL
WIRE TRANSFER FEES IMPOSED BY THE SUBSCRIBER’S BANK.

    

    ALL
DOCUMENTS SHOULD BE RETURNED TO:

    

    Philadelphia
Brokerage Corporation

    2 Radnor
Corporate Center

    100
Matsonford Road, Suite 111

    Radnor,
Pennsylvania 19087

    Tel.
(610) 975-9990

    

    In
the event you decide not to participate in this offering please return this
Confidential Subscription Agreement to the principal office of the Placement
Agent as set forth above.

    

    THE
FOLLOWING EXHIBITS ARE ANNEXED TO

    AND
FORM PART OF THIS SUBSCRIPTION AGREEMENT:

    

    EXHIBIT
A:    INVESTOR QUESTIONNAIRE

    

    
      EXHIBIT
B:    FORM
OF WARRANT

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    SUBSCRIPTION
AGREEMENT

    

    The
undersigned (the “Subscriber” or the
“Purchaser”)
hereby subscribes to purchase from Skinny Nutritional Corp., a Nevada
corporation (the “Company”), certain of
the Company’s securities, as described herein, for a total purchase price of
$1,500,000. The Company is offering hereby (the “Offering”) a minimum
of $250,000 of units of its securities (the “Minimum Offering”) on
a “best efforts, all or none” basis and an additional $1,250,000 of units of its
securities on a “best efforts” basis (the “Maximum Offering”).
Each unit of securities offered hereby consists of one share of common stock,
par value $.001 per share (the “Common Shares”) and
one warrant to purchase a share of Common Stock (the “Warrants”). The
Common Shares and Warrants may collectively be referred to herein as the “Securities”. The
Minimum Offering consists of 4,166,667 Common Shares and Warrants and the
Maximum Offering consists of 25,000,000 Common Shares and Warrants. The Company
has engaged Philadelphia Brokerage Corporation to act as its selling agent for
the Offering (the “Selling
Agent”)

    

    Article
I

    SALE OF
SECURITIES

    

    1.1     
Sale of Securities; Offering Period

    

    (a)          Subject
to the terms and conditions hereof and on the basis of the representations and
warranties hereinafter set forth, the Company hereby agrees to issue and sell to
the Subscriber and the Subscriber agrees to purchase from the Company, upon
Closing, the Securities as described herein for the Purchase Price as set forth
on the signature page of this Subscription Agreement executed by the Subscriber.
The number of Securities purchased hereunder by a Subscriber shall be as
specified on the signature page of this Subscription Agreement executed by the
Subscriber. The Company may reject any subscription in whole or in part. The
Company is selling the Common Shares and Warrants in this Offering at a purchase
price of $0.06 per Common Share and Warrant (the “Purchase Price”) for
a minimum subscription amount of $20,000 (333,333 Common Shares and 333,333
Warrants), unless waived by the Company and Selling Agent. The Company is
offering the Securities on a “best efforts, all or none” basis as to the Minimum
Offering of $250,000 and on a “best efforts” basis as the Maximum Offering
amount. The Minimum Offering consists of a total of 4,166,667 Common Shares and
4,166,667 Warrants and the Maximum Offering consists of a total of 25,000,000
Common Shares and 25,000,000 Warrants. The Common Shares and Warrants will
be issued separately, but can only be purchased together in this Offering. This
Offering is only being made to “accredited investors” (as defined in Rule 501
under the Securities Act of 1933, as amended (the “Securities Act”)) in
reliance upon an exemption from registration under Section 4(2) of the
Securities Act and/or Regulation D promulgated thereunder, and on similar
exemptions under applicable state laws. The Securities may be purchased, in part
or their entirety, by officers and directors of the Company or representatives
of the Selling Agent and such purchases may be used to satisfy the Minimum
Offering.

    

    (b)          Each
Subscriber will receive a Warrant to purchase one (1) share of common stock
(each a “Warrant
Share”) for each Common Share it purchases in this Offering. The warrants
are exercisable at an exercise price of $0.10 per share. The Warrants are
exercisable commencing on the issue date and expire 24 months from the initial
exercise date. The Warrants also include a mandatory redemption feature. See
“Description of Warrants” below.

    

    (c)          The
Securities are being offered during the offering period commencing on the date
set forth on the cover page of this Subscription Agreement and terminating on
the earlier of (a) 5:00 p.m. (New York time) on June 30, 2010, unless extended
by the Company and Selling Agent for an additional period expiring no later than
August 31, 2010 or (b) the date on which all the Securities authorized for sale
have been sold (the “Offering
Period”).

    

    1.2      High Risk Investment. This
investment is speculative and should only be made by investors who can afford
the risk of loss of their entire investment. The proceeds from the sale of the
Securities will be used to fund short term capital needs to enable the Company
to maintain operations until additional funding is received. The Company may
sell additional securities after the completion of this transaction to further
fund its operations. Unless the Company is successful in completing these
additional funding transactions, or is able to generate sufficient revenue from
operations, the Company may be forced to significantly curtail its operations
and the Subscribers will lose their entire investment.

    
      
         

      

      
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    1.3     
Selling Agent. The
Company has engaged Philadelphia Brokerage Corporation to serve as its Selling
Agent in connection with this Offering for the sale of the Securities and pay
commissions of up to 10% of the gross proceeds from the sale of the Securities
in this Offering to subscribers procured by such Selling Agent and may pay other
compensation to the Selling Agents who procure purchasers of the Securities. We
will issue to each Selling Agent a warrant (the “Agent Warrants”) to
purchase such number of Common Shares as equals 10% of the total number of
Common Shares actually sold in the Offering to Subscribers procured by each
Selling Agent (not including any shares of Common Stock issuable upon exercise
of the Warrants). Agent Warrants shall be exercisable at the per share price of
$0.10 and otherwise be on the same terms and conditions as the Warrants. The
Company has to indemnify the Selling Agent against certain liabilities,
including liabilities under the Securities Act of 1933, and liabilities arising
from breaches of representations and warranties contained in the agreement, or
to contribute to payments that it may be required to make in respect of such
liabilities and will reimburse the Selling Agent for legal expenses incurred by
it in connection with this Offering, subject to a cap of $15,000.

    

    Summary
of Offering

    

    
      
        
          
            
              
                	
                        Offering
      Summary:

                      	 
      	
                        The
      Company is offering a minimum of $250,000 of units of Securities and a
      maximum of $1,500,000 of units of Securities. The Securities are being
      offered on a “best efforts, all or none” basis as to the Minimum Offering
      and a “best efforts” basis as to the remaining portion up to the Maximum
      Offering. Each unit consists of one Common Share and one
      Warrant.

                      
	 	 	 
	
                        Offering
      Period:

                      	 
      	
                        The
      Securities are being offered during the Offering Period commencing on the
      date set forth on the cover page of this Subscription Agreement and
      terminating on the earlier of (a) 5:00 p.m. (New York time) on June 30,
      2010, unless extended by the Company and Selling Agent for an additional
      period expiring no later than August 31, 2010 or (b) the date on which all
      the Securities authorized for sale have been sold.

                      
	 	 	 
	
                        Purchase
      Price:

                      	 
      	
                        The
      Securities are being offered for a Purchase Price of $0.06 per unit of
      Securities.

                      
	 	 	 
	
                        Minimum
      Subscription:

                      	 
      	
                        The
      minimum subscription amount for the Securities is $20,000, although the
      Company may accept subscriptions in lesser amounts in its sole
      discretion.

                      
	 	 	 
	
                        Description
      of Warrants:

                      	 
      	
                        Each
      Subscriber will receive one Warrant to purchase one (1) share of
      common stock for each Common Share it purchases in this Offering. The
      Warrants are exercisable at an exercise price of $0.10 per share during
      the period commencing on the issue date of the Warrant and expire 24
      months from the initial exercise date.

                      
	 
      	 
      	 
      
	
                        Warrant
      Redemption:

                      	 
      	
                        The
      Warrants shall provide that if the closing price of the Company’s Common
      is at least $0.14 per share for 20 consecutive trading days, the Company
      may redeem such Warrants and in such event a Subscriber must exercise such
      Warrants within a limited period from the date that a notice of redemption
      is delivered by the Company or the Warrants shall be automatically
      cancelled and only represent the right to receive a redemption payment of
      $.001 per share. The description of terms and conditions of the Warrants
      set forth herein does not purport to be complete and is qualified in its
      entirety by the full text of the form of Warrant, which is attached hereto
      as Exhibit
B.

                      

              

            

          

        

      

    

    
      
         

      

      
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                      Escrow:

                    	 
      	
                      Until
      the Minimum Offering is sold and during the remaining Offering Period, all
      offering proceeds shall be held in a non-interest bearing escrow account
      with The Bryn Mawr Trust Company located in Bryn Mawr, Pennsylvania (the
      “Escrow
      Agent”).  In the event the Minimum Offering is not sold
      by the end of the Offering Period, all offering proceeds shall be returned
      to the investors without interest thereon or deduction
      therefrom.

                    
	 
      	 
      	 
      
	Piggyback	 	 
	
                      Registration
      Rights:

                    	 
      	
                      Subscribers
      shall be entitled to the piggyback registration rights applicable to the
      Common Shares and the Warrant Shares, as described in Section 5.1 of this
      Agreement.

                    
	 
      	 
      	 
      
	
                      Subscription
      Procedure:

                    	 
      	
                      In
      order to subscribe for the Securities, each prospective subscriber must
      complete, execute and deliver to the Company a signature page evidencing
      such prospective subscriber’s execution of this Subscription Agreement
      along with a completed confidential Purchaser
    Questionnaire.

                    
	 
      	 
      	 
      
	
                      Use
      of Proceeds:

                    	 
      	
                      The
      Company will use the proceeds for working capital and general corporate
      purposes.

                    
	 	 	 
	
                      Restrictions
      on

                    	 
      	 
      
	
                      Transferability:

                    	 
      	
                      The
      Securities have not been registered under the Securities Act or under the
      securities laws of the United States or of any state or other
      jurisdiction. As a result, the Securities may not be transferred without
      registration under the Securities Act, or, if applicable, the securities
      laws of any state or other jurisdiction, unless in the opinion of counsel
      to the Company, such registration is not then required because of the
      availability of an exemption from registration.

                    
	 
      	 
      	 
      
	
                      Investment:

                    	 
      	
                      An
      investment in the Company is highly speculative, and each investor bears
      the risk of losing his, her or its entire investment. All Purchasers must
      complete and execute a Subscription Agreement and a confidential Purchaser
      Questionnaire. Purchasers must set forth representations in such documents
      that he, she or it is purchasing the Securities for investment purposes
      only and without a view toward distribution. The Securities are suitable
      investments only for sophisticated investors for whom an investment in the
      Securities does not constitute a complete investment program and who fully
      understand, are willing to assume, and who have the financial resources
      necessary to withstand, the risks involved in investing in the Securities
      and who can bear the potential loss of their entire investment. The
      Securities are being offered and sold only to persons who qualify as
      “accredited investors,” as defined under Regulation D of the Securities
      Act

                    

            

          

        

      

    

    
      
         

      

      
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      1.4       Escrow; Minimum Offering Amount;
Closings. The Subscriber acknowledges and agrees that all subscription
amounts will be deposited in a non-interest bearing account established on
behalf of the Company at The Bryn Mawr Trust Company. At each closing of the
transactions contemplated herein (the “Closing”), the
Subscribers shall purchase, severally and not jointly, and the Company shall
issue and sell, to the Subscribers the amount of Securities as indicated on the
signature page of each Subscriber’s subscription agreement, up to the Maximum
Offering amount. Once the Minimum Offering amount has been subscribed for and
accepted by the Company and the Selling Agent, an initial closing (the “Initial Closing”)
will be held as soon as practicable. The Securities may be purchased, in part or
their entirety, by officers and directors of the Company or representatives of
the Selling Agent and such purchases may be used to satisfy the Minimum
Offering. If the Minimum Offering amount is not received prior to June 30, 2010
(or August 31, 2010, if extended by the Company and Selling Agent) then all
funds held in escrow shall be returned to Subscribers without interest or
deduction.  The Initial Closing shall occur on the date that
subscriptions for at least the Minimum Offering amount have been received and
accepted by the Company and the Selling Agent at the offices of Becker &
Poliakoff, LLP, 45 Broadway, New York, NY 10006, or such other time and/or
location as the parties shall mutually agree. Assuming the Minimum Offering
amount is subscribed for and accepted and a Closing held, thereafter additional
subscription funds will be placed into the escrow account and additional
closings will be held from time to time up to the sale of the Maximum Offering.
Once the Maximum Offering amount has been subscribed for and accepted by the
Company, a final closing will be held (“Final Closing”). The
Final Closing shall be either the date on which this Offering is fully
subscribed or the last date during the Offering Period on which the Company
accepts a subscription, whichever is latest.

    

    

    1.5       Closing Matters. At each
Closing the following actions shall be taken:

    

    (a)        each
Subscriber shall deliver its Purchase Price in immediately available United
States funds to the escrow account established for the Offering;

    

    (b)        the
Company shall cause its stock transfer agent to deliver certificates
representing the Common Shares subscribed for to each Subscriber;

    

    (c)        the
Company shall deliver to each Subscriber a certificate representing the Warrants
subscribed for; and

    

    (d)     
  each of the Company and the Subscriber shall deliver to the other
signed copies of this Agreement and the Subscriber shall deliver to the Company
a completed and executed Purchaser Questionnaire.

    

    
      1.6       Use of
Proceeds.  The Company intends to use the proceeds derived from
this Offering to satisfy its working capital requirements and general corporate
purposes. Management reserves the right to utilize the net proceeds of the
Offering in a manner in the best interests of the Company. Accordingly,
management will have broad discretion in the application of the proceeds of the
Offering. The amount of the net proceeds that will be invested in particular
areas of the Company’s business will depend upon future economic conditions and
business opportunities. To the extent that the Company continues to incur losses
from operations, such losses will be funded from its general funds, including
the net proceeds of this Offering.

    

    

    1.7       Certain
Reports Filed Under the Securities Exchange Act of 1934.

    

    (a)        Annual Report on Form 10-K
for the year ended December 31, 2009. On April 2, 2010, the Company filed
its Annual Report on Form 10-K for the year ended December 31, 2009 (the “2009 Annual Report”)
with the United States Securities and Exchange Commission (the “SEC”).

    
      
         

      

      
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    (b)       Quarterly Reports on Form
10-Q. On May 15, 2009, the Company filed its Quarterly Report on Form
10-Q for the quarter ended March 31, 2009; on August 14, 2009, the Company filed
its Quarterly Report on Form 10-Q for the quarter ended June 30, 2009; and on
November 23, 2009 the Company filed its Quarterly Report on Form 10-Q for the
quarter ended September 30, 2009 (the “2009 Quarterly
Reports”) with the SEC.

    

    (c)        Current Reports on Form
8-K. The Company has filed Current Reports on Form 8-K with the SEC on
the following dates during its most recent fiscal year and the current fiscal
year: January 15, 2009, February 6, 2009, March 31, 2009, May 4, 2009, May 27,
2009, May 28, 2009, July 7, 2009, July 13, 2009, July 22, 2009, October 27,
2009, November 2, 2009, December 1, 2009, December 17, 2009, January 5, 2010,
and March 1, 2010 (excluding Current Reports on Form 8-K deemed to have been
furnished rather than filed with the SEC, the “Current
Reports”).

    

    (e)        Acknowledgement and
Confirmation. The undersigned hereby agrees and acknowledges that it has
been advised that the Company has filed with the SEC the 2009 Annual Report, the
2009 Quarterly Reports and the Current Reports (collectively, the “SEC Reports”) and
that it has either obtained or has access to (through the public website of the
SEC or otherwise) the SEC Reports. The SEC Reports comprise an integral part of
this Agreement and each Subscriber is urged to read each such report in its
entirety. The undersigned further agrees that the SEC Reports are incorporated
herein by reference, that it has taken the opportunity to review such reports in
their entirety, including the risk factors described therein, and that it has
considered all factors that it deems material in deciding on the advisability of
investing in the Company’s securities.

    

    1.8          Subscriber
Information

    

    
      
        
          
            
              	
                      (a)

                    	 
      	
                      Name(s)
      of

                      SUBSCRIBER(s):
      ____________________

                    
	 	 	 
	 
      	 
      	
                      ____________________________________

                    
	 	 	 
	 
      	 
      	
                      ____________________________________

                    
	 	 	 
	
                      (b)

                    	
                      Principal
      Amount of Securities

                    	 
      
	 
      	
                      Subscribed
      for:

                    	
                      $__________

                    
	 
      	 
      	 
      
	
                      (c)

                    	
                      Accredited
      Investor Status

                    	 
      

            

          

        

      

    

    

    The Subscriber acknowledges and agrees
that the offering and sale of the Securities are intended to be exempt from
registration under the Securities Act, by virtue of Section 4(2) thereof and/or
Regulation D promulgated thereunder.  In accordance therewith and in
furtherance thereof, the Subscriber represents and warrants to and agrees with
the Company as follows [Please check statements applicable to the
Subscriber]:

    

    The Subscriber is an Accredited
Investor because the Subscriber is (check appropriate item):

    

    
      	
               
      

            	
               ̈

            	
              a
      bank as defined in Section 3(a)(2) of the Securities
  Act;

            

    

    

    
      	
               
      

            	
               ̈

            	
              a
      savings and loan association or other institution as defined in Section
      3(a)(5)(A) of the Securities Act;

            

    

    

    
      	
               
      

            	
               ̈

            	
              a
      broker or dealer registered pursuant to Section 15 of the Securities
      Exchange Act of 1934 as amended (the “Exchange
      Act”);

            

    

    

    
      	
               
      

            	
               ̈

            	
              an
      insurance company as defined in Section 2(13) of the Securities
      Act;

            

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      
        	
                 
      

              	
                 ̈

              	
                an
      investment company registered under the Investment Company Act of 1940, as
      amended or a business development company as defined in Section 2(a)(48)
      of such act;

              

      

       

    

    
      	
               
      

            	
               ̈

            	
              a
      Small Business Investment Company licensed by the U.S. Small Business
      Administration under Section 301(c) or (d) of the Small Business
      Investment Act of 1958;

            

    

    

    
      	
               
      

            	
               ̈

            	
              an
      employee benefit plan within the meaning of Title I of the Employee
      Retirement Income Security Act of 1974, as amended, if the investment
      decision is made by a plan fiduciary, as defined in Section 3(21) of such
      Act, which is either a bank, savings and loan association, insurance
      company, or registered investment adviser, or if the employee benefit plan
      has total assets in excess of $5,000,000 or, if a self-directed plan, with
      investment decisions made solely by persons that are accredited
      investors;

            

    

    

    
      	
               
      

            	
               ̈

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

            

    

    

    
      	
               
      

            	
               ̈

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

            

    

    

    
      	
               
      

            	
               ̈

            	
              a
      natural person whose individual net worth or joint net worth with that
      person's spouse, at the time of his purchase exceeds
      $l,000,000;

            

    

    

    
      	
               
      

            	
               ̈

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

            

    

    

    
      	
               
      

            	
               ̈

            	
              a
      trust, with total assets in excess of $5,000,000, not formed for the
      specific purpose of acquiring the securities offered, whose purchase is
      directed by a sophisticated person as described in Rule 506(b)(2)(ii) of
      the Exchange Act;

            

    

    

    
      	
               
      

            	
               ̈

            	
              an
      entity in which all of the equity owners are accredited
      investors.  (If this alternative is checked, the Subscriber must
      identify each equity owner and provide statements signed by each
      demonstrating how each qualifies as an accredited
    investor);

            

    

    

    
      	
               
      

            	
               ̈

            	
              a
      plan established and maintained by a state, its political subdivisions, or
      any agency or instrumentality thereof, for the benefit of its employees,
      if such plan has total assets in excess of $5,000,000;
  or

            

    

    

    
      	
            	
               ̈

            	
              a
      director or officer of the Company.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Additional
      Information.

            

    

    

    The Subscriber has completed the
signature page to this Subscription Agreement and the Questionnaire annexed at
Exhibit A to
this Subscription Agreement.

    
      
         

      

      
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    1.9           Risk
Factors

    

    Investing
in our Securities involves risks and our operating results and financial
condition have varied in the past and may in the future vary significantly
depending on a number of factors. You should consider the following risk factors
in evaluating whether to invest in our Securities. However, the risks described
below are not the only risks facing the Company. In addition to these risk
factors and other risks described elsewhere in this Agreement, you should
carefully consider the risk factors described in our SEC Reports, each of which
has been filed with the Securities and Exchange Commission and which are all
incorporated by reference in this Agreement. These risks could have a material
adverse effect on our business, results of operations, financial condition or
liquidity and cause our actual operating results to materially differ from those
contained in forward-looking statements made in this Agreement, in our SEC
Reports and elsewhere by management. Before making an investment decision, you
should carefully consider these risks as well as other information contained or
incorporated by reference in this Agreement. Additional risks and uncertainties
not currently known to us or that we currently deem to be immaterial also may
materially adversely affect our business, financial condition and/or operating
results.

    

    General
Risks Related to the Company’s Business

    

    The
Warrants include a mandatory redemption provision and will expire if not
exercised in accordance with this provision.

     

    The
Warrants provide that in the event the closing price of the Company’s Common
Stock, which is currently traded over on the OTC Bulletin Board, is at least
$0.14 for 20 consecutive trading days, then the Company may redeem such Warrant
for a redemption price of $.001 per share unless the Warrant holders elect
to exercise such Warrants within a limited period immediately following such
event. In the event that the Company is able to redeem the Warrants, in the
event a holder does not exercise such Warrants within the time period
allotted for such exercise, the Warrants will be deemed expired and
un-exercisable. In such event, the Warrants will only represent the right to
receive the redemption payment. In making such election, a holder must be
cognizant of the fact that the Warrants must be exercised for cash, the Company
has no obligation to register the resale of the Warrant Shares issuable upon
exercise and that following any such exercise of the Warrants, such Warrant
Shares will be restricted securities and the Subscriber must hold the Warrant
Shares for the duration of the relevant holding period provided for by Rule 144
as adopted by the Commission under the Securities Act.

     

    Further,
following the exercise of the Warrants in response to a redemption notice, the
market price of the Company’s Common Stock may fall and a holder may not be able
resell the Warrant Shares. Rule 144 promulgated under the Securities Act
requires, among other conditions, a holding period prior to the resale of
securities acquired in a non-public offering without having to satisfy the
registration requirements of the Securities Act. In addition, there can be no
assurance that we will fulfill in the future any reporting requirements under
the Exchange Act, or disseminate to the public any current financial or other
information concerning the Company, as required by Rule 144 as one of the
conditions of its availability. Accordingly, due to these and other factors, the
holder of the Warrant Shares bears the risk of losing its entire investment in
exercising the Warrants in order to purchase the Warrant Shares.

    

    The
Company has a history of operating losses. If it continues to incur operating
losses, it may have insufficient working capital to maintain operations and may
require additional capital to do so.

    

        
As of December 31, 2009, the Company had a net loss of $7,305,831 and an
accumulated deficit of $30,912,821, of which $19,652,598 is directly related to
the development of Skinny Nutritional products. The Company had a net loss of
$6,232,123 for the fiscal year ended December 31, 2008 and an accumulated
deficit of $22,229,657 of which $14,234,212 is directly related to the
development of Skinny Nutritional products. For the years ended December 31,
2009 and December 31, 2008, the Company incurred a net loss from operations
of $7,223,640 and $5,199,536, respectively.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    The
Company generated revenues of $4,146,066 (net of billbacks of $687,507 and
slotting fees of $453,022) for the fiscal year ended December 31, 2009 as
compared to revenues of $2,179,055 (after billbacks of $112,717) for the year
ended December 31, 2008. If the Company is not able to begin to earn an
operating profit at some point in the future, it will eventually have
insufficient working capital to maintain its operations as it presently intends
to conduct them. In light of the foregoing, the Company presently anticipates
that it will require additional funds in order to implement its business plan
and sustain its operations.

    

    The
Company has relied on capital raised from private placements of its securities
to fund operations and its independent auditors have included a “going concern”
opinion in their report included in the Company’s Annual Report.

     

    The
Company has been substantially reliant on capital raised from private placements
of its securities, in addition to a revolving line of credit, to fund its
operations. The Company has an immediate need for cash to fund its working
capital requirements and business model objectives. The Company, however,
currently has no firm agreements with any third-parties for such transactions
and no assurances can be given that it will be successful in raising sufficient
capital from any proposed financings. At December 31, 2009, the Company’s cash
and cash equivalents were approximately $191,000.

    

    During
the 2008 fiscal year, the Company raised approximately $3,500,000 from the sale
of securities to accredited investors in private transactions pursuant to
Rule 506 of Regulation D under the Securities Act of 1933, as amended. Further,
during the 2009 fiscal year, the Company has raised an aggregate amount of
approximately $4,900,000 from the sale of securities to accredited investor in
previous private placements under Rule 506. However, as the Company has
experienced similar trends with respect to its rate of cash used in operations,
it will need to satisfy its cash requirements through the offer and sale of
additional securities, including those in this Offering. The Company expects the
proceeds of this Offering, assuming the sale of the Maximum Offering, together
with available cash, will only last for a minimal period of time. Thereafter,
the Company expects to require additional capital which it would seek to raise
from the sale of additional securities or through a debt financing arrangement.
If less than the Maximum Offering is sold, the Company will need to raise a
greater amount of capital than presently and to do so sooner than anticipated.
Any failure to raise adequate capital in a timely manner would have a material
adverse effect on our business, operating results, financial condition and
future growth prospects.

    

    Our
independent auditors have included a “going concern” explanatory paragraph in
their report to our financial statements for the years ended December 31, 2009
and December 31, 2008, citing recurring losses from operations. Our capital
needs in the future will depend upon factors such as market acceptance of our
products and any other new products we launch, the success of our independent
distributors and our production, marketing and sales costs. None of these
factors can be predicted with certainty. The Company must satisfy its future
cash needs by further developing a market for its products, selling additional
securities in private placements or by negotiating for an extension of credit
from third party lenders. The Company presently anticipates that it will require
additional funds in order to implement its business plan and sustain its
operations.

    

    If the
Company is unable to achieve sufficient levels of sales, it will need
substantial additional debt or equity financing in the future in addition to any
funds which it may receive in this Offering and the Company currently has no
commitments or arrangement with respect to any additional financings. No
assurances can be given that any additional financing, if required, will be
available or, even if it is available that it will be on acceptable terms. If
the Company raises additional funds by selling common stock or convertible
securities, the ownership of our existing shareholders will be diluted. If
additional funds are raised though the issuance of equity or debt securities,
such additional securities may have powers, designations, preferences or rights
senior to our currently outstanding securities. Any inability to obtain required
financing on sufficiently favorable terms could have a material adverse effect
on our business, results of operations and financial condition. If the Company
is unsuccessful in raising additional capital and increasing revenues from
operations, it will need to reduce costs and operations substantially. Further,
if expenditures required to achieve plans are greater than projected or if
revenues are less than, or are generated more slowly than, projected, the
Company will need to raise a greater amount of funds than currently
expected.  

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    The
Securities offered hereby are “restricted securities” and may not be transferred
or resold absent registration or an exemption therefrom.

    

    The
Securities offered hereby will be issued pursuant to an exemption from
registration under the Securities Act and therefore have not been and will not
be registered under that act or any applicable state securities laws.
Consequently, the Securities may be sold, transferred, or otherwise disposed of
by the Purchasers hereunder only if, among other things, the Common Shares and
Warrant Shares registered or, in the opinion of counsel acceptable to us,
registration is not required under the Securities Act or any applicable state
securities laws. Accordingly, Subscribers will need to rely on exemptions
to the registration requirements under the Securities Act and the “blue sky”
laws in order to be able to resell the Securities offered hereby.

    

    Purchasers
of our Securities must be aware of the long-term nature of their investment and
be able to bear the economic risks of their investment for an indefinite period
of time. The Securities have not been registered under the Securities Act or the
securities or “blue sky” laws of any state. The right of any Subscriber to sell,
transfer, pledge or otherwise dispose of the Securities offered herein will be
limited by the Securities Act and state securities laws and the regulations
promulgated thereunder. Accordingly, under the Securities Act, the Securities
offered herein may not be resold unless a registration statement is filed and
becomes effective or an exemption from registration is available. The Company is
not under any affirmative obligation to file a registration statement covering
the Securities and even if the Company did file a registration statement
covering the Securities, there can be no assurance that any such registration
statement would be declared effective. Further, there can be no assurance that a
liquid market for our Common Stock will be sustained. Rule 144 promulgated under
the Securities Act requires, among other conditions, a holding period prior to
the resale of securities acquired in a non-public offering without having to
satisfy the registration requirements of the Securities Act. There can be no
assurance that we will fulfill in the future any reporting requirements under
the Exchange Act, or disseminate to the public any current financial or other
information concerning the Company, as required by Rule 144 as one of the
conditions of its availability.

    

    There
is no public market for the Warrants.

    

    There is
no public market for the Warrants being offered hereunder and one will not
develop as a result of this Offering. Although the Company’s Common Stock is
traded on the Over-the-Counter Bulletin Board, due to the risks of investing in
a restricted security, all investors must therefore bear the economic risk of
their investment in the Warrants for an indefinite period of time. Investors
should be aware of the high risks involved in an investment in the
Company.

    

    No
assurances that enough Securities will be sold to pursue business
strategies.

    

    No person
or entity is committed to purchase any of the Securities offered pursuant to
this Offering, and no assurance is or can be given that all or any of the
Securities offered hereunder will be sold. No escrow account for the
subscription amounts from investors is maintained and no minimum amounts of
Securities are required to be sold.  Proceeds received from the
Offering will be available to the Company upon receipt, which the Company
intends to promptly utilize in accordance with the terms of the “Use of
Proceeds” section of this Subscription Agreement. In the event that the Company
is unable to sell all or a significant portion of the Securities pursuant to the
Offering, the Company may have insufficient capital after making the aforesaid
payments to proceed with the Company’s business strategies and thus may be
forced to seek additional capital sooner than would have been the case had the
Offering been fully subscribed. There can be no assurance that such additional
funds will be available to the Company when required on terms acceptable to the
Company. The Company’s inability to obtain financing on favorable terms could
restrict its operations and could materially harm an investment in the
Company.

    
      
         

      

      
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    This
Offering is being made on a best efforts basis.

     

    This
Offering is being made on a “best efforts” rather than a firm commitment basis.
No commitment exists by anyone, including the Selling Agent, to purchase all or
any part of the Securities being offered pursuant to this Offering. There can be
no assurance that any Securities offered hereby will be sold.

     

    No
independent counsel for Purchasers.

    

    The
Company has employed its own legal counsel in connection with this Offering. The
Purchasers have not been represented by independent counsel in connection with
the preparation of this Subscription Agreement or the terms of this Offering and
no investigation of the merits or fairness of this Offering has been conducted
on behalf of the Purchasers. Company Counsel has not conducted due diligence on
behalf of the Purchasers. Prospective investors should consult with their own
legal, tax and financial advisors with respect to the Offering made
hereby.

    

    Availability of
Securities Act exemption.

    

    The
Securities are being offered pursuant to various available exemptions from
registration from U.S. federal and state securities law registration
requirements. Compliance with such laws, which must be met in order for such
exemptions to be available to us, is highly technical and to some extent
involves elements beyond our control. If the proper exemptions do not ultimately
prove to be available, we could be subject to the claims of all or only some of
our shareholders for violations of federal or state securities laws, which could
materially adversely affect our profitability or operations or make an
investment in the Securities worthless.

    

    The
equity interests of Purchasers are subject to substantial dilution.

    

    Under its
articles of incorporation, the Company is presently authorized to issue up to
500,000,000 shares of Common Stock. As of March 25, 2010, there are outstanding
292,668,294 shares of Common Stock. The Company may, at any time after
consummation or termination of this Offering, offer and sell additional
securities of the Company upon such terms and conditions as the Board believes
to be in the best interests of the Company. The Company may seek to engage in
future offerings of its securities so as to sustain the operations and business
activities of the Company. The sale of additional equity securities will dilute
or reduce the percentage of ownership interests of the Purchasers. Further, the
market price of our Common Shares could fall due to an increase in the number of
shares available for sale in the public market.

    

    Exercise
or conversion of outstanding options, warrants and shares of convertible
preferred stock will dilute stockholders and could decrease the market price of
our common stock.

     

    As of
December 31, 2009, there were issued and outstanding options to purchase
27,637,500 shares of common stock and warrants to purchase an aggregate of
24,152,765 additional shares of common stock To the extent that these securities
are exercised or converted, dilution to our shareholders will occur. In
addition, the Company sold 20,350 shares of Series A Preferred Stock during
fiscal 2009. Under the terms of the Certificate of Designation, Preferences,
Rights and Limitations of the Series A Preferred Stock, all shares of Series A
Preferred Stock were automatically convertible into 33,916,667 shares of Common
Stock upon the filing by the Company of a Certificate of Amendment to its
Articles of Incorporation with the Secretary of State of Nevada. However, as of
December 31, 2009, holders of 2,465 shares of Series A Preferred Stock have not
yet surrendered such shares for cancellation and the Company will issue an
additional 4,108,333 shares of Common Stock to such holders upon the surrender
of their certificates representing shares of Series A Preferred Stock. The
exercise and conversion of these securities by the holders may adversely affect
the market price of the Company’s Common Shares and the terms under which we
could obtain additional equity capital.

    
      
         

      

      
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    We
do not anticipate paying dividends in the foreseeable future, and the lack of
dividends may have a negative effect on the price of our Common
Stock.

    

    We
currently intend to retain our future earnings, if any, to support operations
and to finance expansion and therefore, we do not anticipate paying any cash
dividends on our Common Stock in the foreseeable future.

    

    Our
Common Stock is traded on the OTC Bulletin Board, which may be detrimental to
investors.

    

    Our
Common Shares are currently traded on the OTC Bulletin Board. Stocks traded on
the OTC Bulletin Board generally have limited trading volume and exhibit a wide
spread between the bid/ask quotations. We cannot predict whether a more active
market for our Common Shares will develop in the future. In the absence of an
active trading market investors may have difficulty buying and selling our
Common Shares or obtaining market quotations; market visibility for our Common
Shares may be limited; and a lack of visibility for our Common Shares may have a
depressive effect on the market price for our Common Shares.

    

    Our
Common Shares are subject to restrictions on sales by broker-dealers and
penny stock rules, which may be detrimental to investors.

    

    Our
Common Shares are subject to Rules 15g-1 through 15g-9 under the Exchange
Act, which imposes certain sales practice requirements on broker-dealers who
sell our Common Shares to persons other than established customers and
“accredited investors” (as defined in Rule 501(c) of the Securities Act). For
transactions covered by this rule, a broker-dealer must make a special
suitability determination for the purchaser and have received the purchaser’s
written consent to the transaction prior to the sale. This rule adversely
affects the ability of broker-dealers to sell our Common Shares and purchasers
of our Common Shares to sell their shares of our Common Shares.

    

    Additionally,
our Common Shares are subject to SEC regulations applicable to “penny
stocks.” Penny stocks include any non-Nasdaq equity security that has a market
price of less than $5.00 per share, subject to certain exceptions. The
regulations require that prior to any non-exempt buy/sell transaction in a penny
stock, a disclosure schedule proscribed by the SEC relating to the penny stock
market must be delivered by a broker-dealer to the purchaser of such penny
stock. This disclosure must include the amount of commissions payable to both
the broker-dealer and the registered representative and current price quotations
for our Common Shares. The regulations also require that monthly statements be
sent to holders of a penny stock that disclose recent price information for the
penny stock and information of the limited market for penny stocks. These
requirements adversely affect the market liquidity of our Common
Shares.

    

    There
are outstanding a significant number of shares available for future sales under
Rule 144.

    

    As of
December 31, 2009, of the 289,921,081 issued and outstanding shares of our
Common Stock, approximately135,036,334 shares may be deemed “restricted shares”
and, in the future, may be sold in compliance with Rule 144 under the securities
Act of 1933, as amended. Rule 144 provides that a person holding restricted
securities for a period of six months may sell in brokerage transactions an
amount equal to 1% of our outstanding Common Stock every three months. A person
who is a “non-affiliate” of our Company and who has held restricted securities
for over one year is not subject to the aforesaid volume limitations as long as
the other conditions of the Rule are met. Possible or actual sales of our Common
Stock by certain of our present shareholders under Rule 144 may, in the future,
have a depressive effect on the price of our Common Stock in any market which
may develop for such shares. Such sales at that time may have a depressive
effect on the price of our Common Stock in the open market.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    A
substantial number of shares may be sold in the market following this offering,
which will further dilute our common shareholders and may depress the market
price for our common stock.

    

    Sales of
a substantial number of shares of our common stock in the public market
following this offering could cause the market price of our common stock to
decline. If the Maximum Offering is completed, we will issue an aggregate of
25,000,000 additional Common Shares and 25,000,000 additional Warrants. This
would increase the total number of outstanding shares of Common Stock at March
25, 2010, to 317,668,294 shares, assuming no exercise of outstanding options or
warrants and no exercise of the Warrants. The issuance of a substantial number
of our Common Shares will dilute the equity interests of the Company’s current
stockholders. Further, as a substantial majority of the outstanding shares of
our common stock are, tradable without restriction or further registration under
the Securities Act of 1933 unless these shares are purchased by affiliates, the
issuance of the Common Shares offered hereby may further depress the market
price of our Common Stock.

    

    Our management will have broad
discretion with respect to the use of the proceeds of this
offering.

    

    Although
we have highlighted the intended use of proceeds for this Offering, our
management will have broad discretion as to the application of these net
proceeds and could use them for purposes other than those contemplated at the
time of this Offering. Our stockholders may not agree with the manner in which
our management chooses to allocate and spend the net proceeds.

    

    Preferred
Stock as an anti-takeover device.

    

    The
Company is authorized to issue 1,000,000 shares of preferred stock, $0.001 par
value. Presently, the Company does not have any shares of preferred stock
outstanding.  The preferred stock may be issued in series from time to
time with such designation, voting and other rights, preferences and limitations
as our Board of Directors may determine by resolution. Unless the nature of a
particular transaction and applicable statutes require such approval, the Board
of Directors has the authority to issue these shares without stockholder
approval subject to approval of the holders of our preferred stock. The issuance
of preferred stock may have the effect of delaying or preventing a change in
control of the Company without any further action by our
stockholders.

    

    Forward
Looking Statements

    

    This
Agreement and the exhibits annexed hereto contain certain forward looking
information within the meaning of the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended. These statements relate to
future events or future predictions, including events or predictions relating to
our future financial performance, and are generally identifiable by use of the
use of forward-looking terminology such as “believes”, “expects”, “may”, “will”,
“should”, “plan”, “intend”, or “anticipates” or the negative thereof or other
variations thereon or comparable terminology, or by discussion of strategy that
involve risks an uncertainties. Management wishes to caution each Subscriber
that these forward-looking statements and other statements contained herein
regarding matters that are not historical facts, are only predictions and
estimates regarding future events and circumstances and involve known and
unknown risks, uncertainties and other factors, including the risks described
under “Risk Factors” that may cause the Company’s or its industry’s actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. This
information is based on various assumptions by the management which may not
prove to be correct.

    

    In
addition to the risks described in Risk Factors, important factors to consider
and evaluate in such forward-looking statements include: (i) changes in the
external competitive market factors which might impact the Company’s results of
operations; (ii) unanticipated working capital or other cash requirements
including those created by the failure of the Company to adequately anticipate
the costs associated with clinical trials, manufacturing and other critical
activities; (iii) changes in the Company’s business strategy or an inability to
execute its strategy due to the occurrence of unanticipated events; (iv) the
inability or failure of the Company’s management to devote sufficient time and
energy to the Company’s business; and (v) the failure of the Company to complete
any or all of the transactions described herein on the terms currently
contemplated. In light of these risks and uncertainties, there can be no
assurance that the forward-looking statements contained or incorporated by
reference in this Agreement will in fact transpire.

    
      
         

      

      
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    All of
these assumptions are inherently subject to significant uncertainties and
contingencies, many of which are beyond the control of our Company. Although the
Company believes that the expectations reflected in the forward-looking
statements are reasonable, the Company cannot guarantee future results, levels
of activity, performance or achievements. Accordingly, there can be no assurance
that actual results will meet expectations or will not be materially lower than
the results contemplated in this Agreement. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date of
this document or, in the case of documents referred to or incorporated by
reference, the dates of those documents. The Company does not undertake any
obligation to release publicly any revisions to these forward-looking statements
to reflect events or circumstances after the date of this document or to reflect
the occurrence of unanticipated events, except as may be required under
applicable U.S. securities law.

    

    Article
II

    REPRESENTATIONS AND
WARRANTIES OF COMPANY

    

    The Company hereby represents and
warrants to the Purchasers as of the date of this Agreement as
follows:

    

    (A)      Organization. The
Company is duly organized, validly existing and in good standing under the laws
of its state of incorporation, with all requisite power and authority to own,
lease, license, and use its properties and assets and to carry out the business
in which it is engaged, except where the failure to have or be any of the
foregoing may not be expected to have a material adverse effect on the Company’s
presently conducted businesses.  The Company is not in violation of
any of the provisions of its articles of incorporation, bylaws or other
organizational or charter documents. The Company is duly qualified to transact
the business in which it is engaged and is in good standing as a foreign
corporation in every jurisdiction in which its ownership, leasing, licensing or
use of property or assets or the conduct of its business make such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, have or reasonably
be expected to result in (i) a material and adverse effect on the legality,
validity or enforceability of this Agreement, (ii) a material and adverse effect
on the results of operations, assets, prospects, business or condition
(financial or otherwise) of the Company, taken as a whole, or (iii) an adverse
impairment to the Company’s ability to perform on a timely basis its obligations
hereunder (any of (i), (ii) or (iii), a “Material Adverse
Effect”).

     

    
      (B)       Capitalization. The
Company is currently authorized to issue 500,000,000 shares of Common Stock,
$0.001 par value per share and 1,000,000 shares of Preferred Stock, $0.001 par
value per share. Except as may be described in this Agreement, no securities of
the Company are entitled to preemptive or similar rights, and no entity or
person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by this
Agreement unless any such rights have been waived. The issue and sale of the
Securities will not (except pursuant to their terms thereunder), immediately or
with the passage of time, obligate the Company to issue shares of Common Stock
or other securities to any entity or person and will not result in a right of
any holder of Company securities to adjust the exercise, conversion, exchange or
reset price under such securities.  As of March 25, 2010, there are
outstanding 292,668,294 shares of Common Stock. Except as disclosed in the SEC
Reports (as defined above), as of the date set forth on the cover of this
Agreement there are no outstanding options, warrants or other rights calling for
the issuance of any share of stock of the Company or any of its subsidiaries or
any security convertible into, or exercisable or exchangeable for, such
stock.

      

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (C)       Authorization;
Enforceability. The Company has the requisite corporate power and
authority to enter into, deliver and consummate the transactions contemplated by
this Agreement, to issue, sell and deliver the Securities, and otherwise to
carry out its obligations hereunder. The execution and delivery of this
Agreement and the Warrants and the consummation by it of the transactions
contemplated thereby have been duly authorized by the Company and no further
action is required by the Company in connection therewith. When executed and
delivered by the Company, this Agreement and the Warrants will constitute the
legal, valid and binding obligation of the Company, enforceable as to the
Company in accordance with their respective terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent
conveyance or transfer, moratorium or other laws or court decisions, now or
hereinafter in effect, relating to or affecting the rights of creditors
generally and as may be limited by general principles of equity and the
discretion of the court having jurisdiction in an enforcement action (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).

    

    
      (D)       Consents. The Company
is not required to obtain any consent, waiver, authorization, approval or order
of, give any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or other person or
entity in connection with the execution, delivery and performance by the Company
of this Agreement or the issuance, sale or delivery of the Securities other than
(i) any filings required by state securities laws, (ii) the filing of a Notice
of a Sale of Securities on Form D with the Commission under Regulation D of the
Securities Act, (iii) those that have been made or obtained prior to or
contemporaneously with the Initial Closing, and (iv) filings pursuant to the
Exchange Act.

      

      (E)       No Conflicts. The
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby in
accordance with the terms and conditions described herein do not and will not:
(i) conflict with or violate any provision of the Company’s certificate or
articles of incorporation, bylaws or other organizational or charter documents,
or (ii)  violate, conflict with, or constitute a default or breach (or
an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company debt or
otherwise) or other understanding to which the Company is a party or by which
any property or asset of the Company is bound or affected, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company is
subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect.

      

      (F)       Issuance of
Securities. The Common Shares and Warrants have been duly authorized and,
when issued and paid for in accordance with this Agreement, will be duly and
validly issued, fully paid and nonassessable and will be issued free and clear
of all liens and encumbrances, other than restrictions on transfer under
applicable securities laws. The Warrant Shares have been duly authorized and,
when issued and paid for in accordance with this Agreement and the Warrants,
will be duly and validly issued, fully paid and nonassessable and will be issued
free and clear of all liens and encumbrances, other than restrictions on
transfer under applicable securities laws.

    

    

          
     (G)      SEC Reports; Financial
Statements.  The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company under
the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
two years preceding the date hereof on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. As of their respective dates, the SEC Reports
(as defined in Section 1.7 above) complied in all material respects with the
requirements of the Exchange Act and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  Except as may be stated in the SEC Reports, the financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    (H)       Litigation. Except as
disclosed in the SEC Reports, there is no pending or, to the best knowledge of
the Company, threatened action, suit, proceeding or investigation before any
court, governmental agency or body, or arbitrator having jurisdiction over the
Company, or any of its affiliates that would affect the execution by the Company
or the performance by the Company of its obligations under this Agreement, and
all other agreements entered into by the Company relating hereto. Except as
disclosed in the SEC Reports, there is no pending or, to the best knowledge of
the Company, threatened action, suit, proceeding or investigation before any
court, governmental agency or body, or arbitrator having jurisdiction over the
Company, or any of its affiliates which litigation if adversely determined could
result in a Material Adverse Effect.

     

    (I)        Liabilities. The
Company has no liabilities or obligations which are material, individually or in
the aggregate, which are not disclosed in the SEC Reports, other than those
incurred in the ordinary course of the Company’s businesses and which,
individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on the Company’s financial condition. Since the date of
the latest audited financial statements included within the SEC Reports, except
as specifically disclosed in a subsequent SEC Report filed prior to the date
hereof, there has been no event, occurrence or development that has had or that
could reasonably be expected to result in a Material Adverse
Effect.

    

     (J)       Compliance.  The
Company is not: (i) in default under or in violation of (and no event has
occurred that has not been waived that, with notice or lapse of time or both,
would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by which it or any of
its properties is bound (whether or not such default or violation has been
waived), (ii) in violation of any judgment, decree or order of any court,
arbitrator or governmental body or (iii) in violation of any statute, rule,
ordinance or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as could not have
or reasonably be expected to result in a Material Adverse Effect.

    

    (K)       Intellectual
Property.   To the Company’s knowledge, the Company owns,
possesses, licenses or has other rights to use, on reasonable terms, all
patents, patent applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology, know-how and other intellectual property (collectively, the “Intellectual
Property”) necessary for the conduct of the Company’s business as now
conducted.  Except as set forth in the SEC Reports or for such matters
which would not be expected to have a Material Adverse Effect, (a) no party has
been granted an exclusive license to use any portion of such Intellectual
Property owned by the Company; (b) to the Company’s knowledge, there is no
material infringement by third parties of any such Intellectual Property owned
by or exclusively licensed to the Company; (c) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others
challenging the Company’s or any subsidiary’s rights in or to any material
Intellectual Property, and the Company is unaware of any facts which would form
a reasonable basis for any such claim; (d) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis for any such
claim; and (e) there is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others that the Company’s business as now
conducted infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary rights of others, and the Company is unaware
of any other fact which would form a reasonable basis for any such
claim.

    

    
      
        
        

      

      
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    (L)       Tax Matters. Except
for matters that would not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect, the Company (i) has made or
filed all United States federal and state income and all foreign income and
franchise tax returns, reports and declarations required by any jurisdiction to
which it is subject, (ii) has paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for periods subsequent
to the periods to which such returns, reports or declarations apply except for
any such amounts that is currently being contested in good
faith.  There are no tax audits or investigations pending, which if
adversely determined would have a Material Adverse Effect; nor are there any
material proposed additional tax assessments against the
Company.

    (M)      Private Placement;
Integration. Neither the Company nor its affiliates (i) has engaged
in any form of general solicitation or general advertising (within the meaning
of Regulation D under the Securities Act) in connection with the offer or sale
of the Shares, or (ii) has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under any
circumstances that would require registration of the Securities under the
Securities Act. Assuming the accuracy of the representations and warranties of
Purchasers, the offer and sale of the Securities by the Company to the
Purchasers pursuant to this Agreement will be exempt from the registration
requirements of the Securities Act.  Neither the Company nor, to the
knowledge of the Company, any of its affiliates has, directly or through any
agent, sold, offered for sale or solicited offers to buy, which is or will be
integrated with the sale of the Securities hereunder, in a manner that would
require the registration, pursuant to the Securities Act, of the
Offering.

    

    (N)       Broker Fees. No
broker, investment banker, financial advisor or other individual, corporation,
general or limited partnership, limited liability company, firm, joint venture,
association, enterprise, joint securities company, trust, unincorporated
organization or other entity (each a “Person”), other than
the Selling Agent, is entitled to any broker’s, finder’s, financial advisor’s
financial advisor’s or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.

    

    (O)       Accountants. To the
knowledge and belief of the Company, the Company’s independent registered public
accounting firm (i) is a registered public accounting firm as required by the
Exchange Act and (ii) is an independent public or certified public accountants
as required by the Securities Act and the Exchange Act.

    

    (P)       Disclosure.  Except
with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms that neither it
nor any other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that it believes constitutes or
might constitute material, non-public information which is not otherwise
disclosed in this Agreement or as will be included in a periodic report to be
filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange
Act.

    
      
         

      

      
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    Article
III

    REPRESENTATIONS AND
WARRANTIES OF PURCHASERS

    

    By signing this Agreement, each
undersigned Purchaser hereby represents and warrants to the Company as follows
as an inducement to the Company to accept the subscription of the
Purchaser:

    

    
      (A)      The
Purchaser acknowledges and agrees that (i) the offering and sale of the
Securities are intended to be exempt from registration under the Securities Act
by virtue of Section 4(2) of the Securities Act and/or Regulation D promulgated
thereunder, (ii) the Securities have not been registered under the Securities
Act and (iii) that the Company has represented to the Purchaser (assuming the
veracity of the representations of the Purchaser made herein and in the
Questionnaire annexed hereto at Exhibit A) that the
Securities have been offered and sold by the Company in reliance upon an
exemption from registration provided in Section 4(2) of the Securities Act and
Regulation D thereunder. In accordance therewith and in furtherance thereof, the
Purchaser represents and warrants to and agrees with the Company that it is an
accredited investor (as defined in Rule 501 promulgated under the Securities
Act) for the reason indicated in Article I of this Subscription
Agreement.

    

    

    
      (B)       The
Purchaser hereby represents and warrants that the Purchaser is acquiring the
Securities hereunder for its own account for investment and not with a view to
distribution, and with no present intention of distributing the Securities or
selling the Securities for distribution. The Purchaser understands that the
Securities are being sold to the Purchaser in a transaction which is exempt from
the registration requirements of the Securities Act.  Accordingly, the
Purchaser acknowledges that it has been advised that the Securities have not
been registered under the Securities Act and are being sold by the Company in
reliance upon the veracity of the Purchaser’s representations contained herein
and upon the exemption from the registration requirements provided by the
Securities Act and the securities laws of all applicable states. The Purchaser’s
acquisition of the Securities shall constitute a confirmation of the foregoing
representation and warranty and understanding thereof.

    

    
      

    

    
      (C)       The
Purchaser (or its “Purchaser
Representative”, if any) has such knowledge and experience in financial
and business matters as is required for evaluating the merits and risks of
making this investment, and the Purchaser or its Purchaser Representative(s) has
received such information requested by the Purchaser concerning the business,
management and financial affairs of the Company in order to evaluate the merits
and risks of making this investment. Further, the Purchaser acknowledges that
the Purchaser has had the opportunity to ask questions of, and receive answers
from, the officers of the Company concerning the terms and conditions of this
investment and to obtain information relating to the organization, operation and
business of the Company and of the Company's contracts, agreements and
obligations or needed to verify the accuracy of any information contained herein
or any other information about the Company.  Except as set forth in
this Agreement, no representation or warranty is made by the Company to induce
the Purchaser to make this investment, and any representation or warranty not
made herein or therein is specifically disclaimed and no information furnished
to the Purchaser or the Purchaser’s advisor(s) in connection with the sale were
in any way inconsistent with the information stated herein. The Purchaser
further understands and acknowledges that no person has been authorized by the
Company to make any representations or warranties concerning the Company,
including as to the accuracy or completeness of the information contained in
this Agreement.

      

      (D)       The
Purchaser is making the foregoing representations and warranties with the intent
that they may be relied upon by the Company in determining the suitability of
the sale of the Securities to the Purchaser for purposes of federal and state
securities laws. Accordingly, each Purchaser represents and warrants that the
information stated herein is true, accurate and complete, and agrees to notify
and supply corrective information promptly to the Company as provided above if
any of such information becomes inaccurate or incomplete. The Purchaser has
completed this Agreement and Questionnaire, has delivered it herewith and
represents and warrants that it is accurate and true in all respects and that it
accurately and completely sets forth the financial condition of the Purchaser on
the date hereof. The Purchaser has no reason to expect there will be any
material adverse change in its financial condition and will advise the Company
of any such changes occurring prior to the closing or termination of the
Offering.

    

    
      
         

      

      
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      (E)       The
Purchaser is not subscribing for any of the Securities as a result of or
subsequent to any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio, any seminar or meeting, or any solicitation of a
subscription by a person not previously known to the Purchaser in connection
with investments in Securities generally.

    

    
      

    

    (F)       The
Purchaser has received or obtained access to certain information regarding the
Company, including this Agreement, the SEC Reports and other accompanying
documents of the Company receipt of which is hereby acknowledged. The Purchaser
has carefully reviewed all information provided to it and has carefully
evaluated and understands the risks described therein related to the Company and
an investment in the Company, and understands and has relied only on the
information provided to it in writing by the Company relating to this
investment. No agent prepared any of the information to be delivered to
prospective investors in connection with this transaction. Prospective investors
are advised to conduct their own review of the business, properties and affairs
of the Company before subscribing to purchase the Securities.

    

    (G)       The
Purchaser also understands and agrees that, although the Company will use its
best efforts to keep the information provided in this Agreement strictly
confidential, the Company or its counsel may present this Agreement and the
information provided in answer to it to such parties as they may deem advisable
if called upon to establish the availability under any federal or state
securities laws of an exemption from registration of the private placement or if
the contents thereof are relevant to any issue in any action, suit or proceeding
to which the Company or its affiliates is a party, or by which they are or may
be bound or as otherwise required by law or regulatory authority.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Purchaser, or include the name of any Purchaser in any filing with the
Commission without the prior written consent of such Purchaser, except as
required by federal securities law in connection with the disclosure of the
transactions contemplated by this Agreement and otherwise to the extent such
disclosure is required by law or regulation, in which case the Company shall
provide the Purchasers with prior notice of such disclosure permitted under this
clause.

    

    
      (H)       The
individual signing below on behalf of any entity hereby warrants and represents
that he/she is authorized to execute this Agreement on behalf of such entity. If
an individual, the Purchaser has reached the age of majority in the state in
which the Purchaser resides. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by all requisite action, if any, in respect thereof on the part of
Purchasers and no other proceedings on the part of Purchasers are necessary to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Purchasers and constitutes a valid and
binding obligation of Purchasers, enforceable against Purchasers in accordance
with its terms (subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and subject, as to enforceability, to
general principles of equity (whether applied in a proceeding in equity or at
law)).

    

    
      

    

    
      (I)        The
Purchaser is aware that the offering of the Securities involves securities for
which only a limited trading market exists, thereby requiring any investment to
be maintained for an indefinite period of time.  The purchase of the
Securities involves risks which the Purchaser has evaluated, and the Purchaser
is able to bear the economic risk of the purchase of such Securities and the
loss of its entire investment. The undersigned is able to bear the substantial
economic risk of the investment for an indefinite period of time, has no need
for liquidity in such investment and can afford a complete loss of such
investment. The Purchaser’s overall commitment to investments that are not
readily marketable is not, and his acquisition of the Securities will not cause
such overall commitment to become, disproportionate to his net worth and the
Purchaser has adequate means of providing for its current needs and
contingencies.

    

    
      
         

      

      
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    (J)           In
entering into this Agreement and in purchasing the Securities, the Purchaser
further acknowledges that:

    

    (i)  The Company has informed
the Purchaser that the Securities have not been offered for sale by means of
general advertising or solicitation and the Purchaser acknowledges that it has
either a pre-existing personal or business relationship with either the Company
or any of its officers, directors or controlling person, of a nature and
duration such as would enable a reasonable prudent investor to be aware of the
character, business acumen, and general business and financial circumstances of
the Company and an investment in the Securities.

    

    (ii)  Neither the Securities
nor any interest therein may be resold by the Purchaser in the absence of a
registration under the Securities Act or an exemption from registration. In
particular, the Purchaser is aware that all of the foregoing described
Securities will be “restricted securities”, as such term is defined in Rule 144
promulgated under the Securities Act (“Rule 144”), and they
may not be sold pursuant to Rule 144, unless the conditions thereof are met.
Other than set forth in this Agreement, the Company has no obligation to
register any securities purchased or issuable hereunder.

    

    (iii)  The following legend
(or substantially similar language) shall be placed on the certificate(s) or
other instruments evidencing the Securities:

    

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER
SUCH NOTES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR
OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO
IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) THE
COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH NOTES, WHICH
COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH NOTES
MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER
CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
APPLICABLE STATE SECURITIES LAWS.

    

    (iv)  The Company may at any
time place a stop transfer order on its transfer books against the Securities.
Such stop order will be removed, and further transfer of the Securities will be
permitted, upon an effective registration of the respective Securities, or the
receipt by the Company of an opinion of counsel satisfactory to the Company that
such further transfer may be effected pursuant to an applicable exemption from
registration.

    

    (K)          The
Company has employed its own legal counsel in connection with the Offering. The
Purchasers have not been represented by independent counsel in connection with
the preparation of this Agreement or the terms of this Offering and no
investigation of the merits or fairness of the Offering has been conducted on
behalf of the Purchasers. Each Purchaser has had the opportunity to consult with
its own legal, tax and financial advisors with respect to the Offering made
pursuant to this Agreement.

    

    (L)          ___________
(insert name of Purchaser Representative: if none leave
blank) has acted
as the Purchaser’s Purchaser Representative for purposes of the private
placement exemption under the Act.  If the Purchaser has appointed a
Purchaser Representative (which term is used herein with the same meaning as
given in Rule 501(h) of Regulation D), the Purchaser has been advised by his
Purchaser Representative as to the merits and risks of an investment in the
Company in general and the suitability of an investment in the Securities for
the Purchaser in particular.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    

    (M)          The
undersigned hereby acknowledges that officers, affiliates, employees and
directors of the Company and/or the Selling Agents may purchase Securities in
the Offering on the same terms and conditions as the Purchasers.

    

    
      (N)           It
never has been represented, guaranteed or warranted by the Company, any of the
officers, directors, stockholders, partners, employees or agents of the Company,
or any other persons, whether expressly or by implication, that: (i) the Company
or the Purchasers will realize any given percentage of profits and/or amount or
type of consideration, profit or loss as a result of the Company’s activities or
the Purchaser’s investment in the Company; or (ii) the past performance or
experience of the management of the Company, or of any other person, will in any
way indicate the predictable results of the ownership of the Securities or of
the Company’s activities.

    

    

    (O)          
The Purchaser acknowledges that any delivery to it of this Agreement relating to
the Securities prior to the determination by the Company of its suitability as a
Purchaser shall not constitute an offer of the Securities until such
determination of suitability shall be made, and the Purchaser hereby agrees that
it shall promptly return this Agreement and the other Offering documents to the
Company upon request. The Purchaser understands that the Company shall have the
right to accept or reject this subscription in whole or in part. Unless this
subscription is accepted in whole or in part by the Company this subscription
shall be deemed rejected in whole.

    

    Article
IV

    INDEMNIFICATION

    

    4.1          Indemnification by the
Company. The Company agrees to defend, indemnify and hold harmless the
Purchasers and shall reimburse Purchasers for, from and against each claim,
loss, liability, cost and expense (including without limitation, interest,
penalties, costs of preparation and investigation, and the reasonable fees,
disbursements and expenses of attorneys, accountants and other professional
advisors) (collectively, “Losses”) directly or
indirectly relating to, resulting from or arising out of any untrue
representation, misrepresentation, breach of warranty or non-fulfillment of any
covenant, agreement or other obligation by or of the Company contained herein or
in any certificate, document, or instrument delivered to Purchasers pursuant
hereto.

    

    4.2          Indemnification by Purchasers.
Purchasers agrees to defend, indemnify and hold harmless the Company and shall
reimburse the Company for, from and against all Losses directly or indirectly
relating to, resulting from or arising out of any untrue representation,
misrepresentation, breach of warranty or non-fulfillment of any covenant,
agreement or other obligation of the Purchasers contained herein or in any
certificate, document or instrument delivered to the Company pursuant
hereto.

    

    4.3          Procedure. The party to be
indemnified hereunder (the “Indemnified Party”)
shall promptly notify the party providing indemnification hereunder (the “Indemnifying Party”)
of any claim, demand, action or proceeding for which indemnification may be
sought under Sections 4.1 or 4.2 of this Agreement, and, if such claim, demand,
action or proceeding is a third party claim, demand, action or proceeding
(collectively, an “Action”), the
Indemnifying Party will have the right at its expense to assume the defense
thereof using counsel reasonably acceptable to the Indemnified Party; provided,
however any failure or delay to so notify the Indemnifying Party will not
relieve it from its obligation to indemnify any  Indemnified Party,
unless and only to the extent that such failure or delay results in the
forfeiture by the Indemnifying Party of substantial rights and defenses or the
Indemnifying Party is otherwise materially prejudiced by such failure or delay.
Any Indemnified Party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party except to the
extent that (i) the employment thereof has been specifically authorized by the
Indemnifying Party in writing, (ii) the Indemnifying Party has failed after a
reasonable period of time to assume such defense and to employ counsel or (iii)
in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Indemnifying Party
and the position of such Indemnified Party, in which case the Indemnifying Party
shall be responsible for the reasonable fees and expenses of no more than one
such separate counsel for the Indemnified Party.  In connection with
any such third party Action, Purchasers and the Company shall cooperate with
each other and provide each other with access to relevant books and records in
their possession. No Indemnifying Party shall, without the prior written consent
of the Indemnified Party, which shall not be unreasonably withheld, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
Action in respect of which any Indemnified Party is or could have been a party
and indemnity was or could have been sought hereunder by such Indemnified Party,
unless such settlement, compromise or consent includes an unconditional release
of such Indemnified Party from all liability on claims that are the subject
matter of such Action. Further, no Indemnified Party seeking indemnification
hereunder will, without the prior written consent of the Indemnifying Party,
which shall not be unreasonably withheld, settle, compromise, consent to the
entry of any judgment in or otherwise seek to terminate any Action. The
Indemnifying Party shall not be liable for settlement of any Action effected
without its written consent.

    
      
         

      

      
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    ARTICLE
V

    ADDITIONAL AGREEMENTS BY THE
PARTIES

    

    5.1           Registration
Rights

    

    Each
Purchaser and the Company agree that the Purchasers shall be entitled to the
registration rights with respect to the Securities as set forth in this Section
5.1

    

    (a)           Definition of Registrable
Securities. As used in this Section 5.1, the term “Registrable Security”
means (i) each of the Common Shares issued under this Agreement; (ii) each of
the Warrant Shares issuable upon exercise of the Warrants issued under this
Agreement; and (iii) any securities issued upon any stock split or stock
dividend in respect thereof; provided, however, that with respect to any
particular Registrable Security, such security shall cease to be a Registrable
Security when, as of the date of determination; (A) it has been and remains
effectively registered under the Securities Act and disposed of pursuant
thereto; (B) in the opinion of counsel to the Company, registration under the
Securities Act is no longer required for subsequent public distribution of such
security pursuant to Rule 144 promulgated under the Securities Act, or
otherwise; or (C) it has ceased to be outstanding. The term “Registrable
Securities” means any and all of the securities falling within the
foregoing definition of “Registrable
Security.” In the event of any merger, reorganization, consolidation,
recapitalization or other change in corporate structure affecting the Common
Stock, such adjustment shall be made in the definition of “Registrable Security”
as is appropriate to prevent any dilution or increase of the rights granted
pursuant to this Clause (a) as determined in good faith by the Board of
Directors.

    

    (b)           Registration by the
Company. Commencing on the Closing Date and for a period of three years
thereafter, in the event that the Company intends to file a registration
statement with the Securities and Exchange Commission under the Securities Act,
other than registration statement on Form S-4 or S-8, or successor forms
thereto, and registration statements filed but not effective prior to the
termination of this Offering, to register for sale any of its shares of Common
Stock, the Company will include for resale under the Securities Act in the
registration statement the Registrable Securities of the Holder in accordance
with this Section 5.1. The Company shall advise the Holder of the Registrable
Securities (such persons being collectively referred to herein as “Holders”) by written
notice at least 20 days prior to the filing by the Company with the Securities
and Exchange Commission of any other registration statement under the Act
covering shares of Common Stock of the Company, except on Forms S-4 or S-8 (or
similar successor form) or registration statements filed but not effective prior
to the termination of this Offering, and upon the request of any such Holder
within ten days after the date of such notice, include in any such registration
statement such information as may be required to permit a public offering of the
Holder’s Registrable Securities. Such Holders shall furnish information and
indemnification as set forth in elsewhere in this Section 5.1. The Company may
withdraw the registration at any time. Notwithstanding the foregoing, if the
registration statement filed by the Company is pursuant to an underwritten
offering of securities sold by the Company or on its
behalf:

    
      
         

      

      
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    (A)           if
the underwriter determines in good faith that marketing factors require the
exclusion of some or all of the Registrable Securities, then the Holders may
include in the registration statement no more than the maximum amount, if any,
of such  Registrable Securities that the underwriter believes will not
jeopardize the success of the offering (the securities so included to be
apportioned pro rata among the Holders according to the total amount of
securities requested to be included therein owned by the Holders or in such
other proportions as shall mutually be agreed upon by such parties). The
Holders’ right to have Registrable Securities included in the first registration
statement filed by the Company shall be deferred to the second registration
statement filed by the Company, which deferral may be continued to the third or
subsequent registration statement so long as the registration statements are
pursuant to underwritten offerings and the underwriter determines in good faith
that marketing factors require exclusion of some or all of the Registrable
Securities held by the Holders; and

    

    (B)           each
Holder of Registrable Securities shall enter into an underwriting agreement in
customary form with the underwriter and provide such information regarding
Holder that the underwriter shall reasonably request in connection with the
preparation of the prospectus describing such offering, including completion of
FINRA Questionnaires.

    

     
 
(c)           Covenants with Respect to
Registration. In connection with the registration in which the
Registrable Securities are included, the Company covenants and agrees as
follows:

    

    (A)           The
Company shall use commercially reasonable efforts to have the registration
statement declared effective as soon as possible after filing, and shall furnish
each Holder of Registrable Securities such number of prospectuses as shall
reasonably be requested. In addition, the Company shall file such amendments as
may be required from time to time, in order to keep any registration statement
filed under this section effective as provided herein. The Company shall use
commercially reasonable efforts to maintain the effectiveness of the
registration statement filed by the Company hereunder until the date that the
Registrable Securities may be sold without volume limitation under SEC Rule
144.

    

    (B)           The
Company shall pay all costs (excluding fees and expenses of Holder(s) counsel
and any underwriting or selling commissions), fees and expenses in connection
with the registration statement filed pursuant hereto including, without
limitation, the Company’s legal and accounting fees, printing expenses, blue sky
fees and expenses.

    

    (C)           The
Company will take all necessary action which may be required in qualifying or
registering the Registrable Securities included in the registration statement,
for offering and sale under the securities or blue sky laws of such states as
reasonably are requested by the Holder(s), provided that the Company shall not
be obligated to execute or file any general consent to service of process or to
qualify as a foreign corporation to do business under the laws of any such
jurisdiction.

    

    (D)           The
Company shall indemnify each Holder of Registrable Securities to be sold
pursuant to the registration statement and each person, if any, who controls
such Holder within the meaning of Section 15 of the Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended (“Exchange Act”),
against all loss, claim, damage, expense or liability (including reasonable
expenses reasonably incurred in investigating, preparing or defending against
any claim) to which any of them may become subject under the Securities Act, the
Exchange Act or otherwise, arising from such registration statement, except to
the extent arising under paragraph (E) below.

    

    (E)        
   Each Holder of Registrable Securities to be sold pursuant to a
registration statement, and their successors and assigns, shall severally, and
not jointly, indemnify the Company, its officers and directors and any
underwriter, and each person, if any, who controls the Company or such
underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against all loss, claim, damage or reasonable expense or liability
(including expenses reasonably incurred in investigating, preparing or defending
against any claim) to which they may become subject under the Securities Act,
the Exchange Act or otherwise, arising (I) from information furnished by or on
behalf of such Holder, or their successors or assigns, for inclusion in such
registration statement, or (II) as a result of use by the Holder of a
registration statement that the Holder was advised to discontinue; provided,
however, that in no event shall any indemnity hereunder exceed the net proceeds
from the offering received by such Holder.

    
      
         

      

      
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    (F)         The
foregoing registration rights shall be contingent on the Holders furnishing the
Company with such appropriate information (relating to the intended means of
distribution of the Registrable Securities of such Holders) as the Company shall
reasonably request.

    

    5.2      
    Disclosure of
Closing.  The Company shall, by 5:30 p.m. (New York City time)
on the fourth business day immediately following the date of the Initial
Closing, file a Current Report on Form 8-K with the SEC containing such
information regarding the Offering as is required pursuant to the requirements
of Form 8-K.

    
 

    5.3       
   Future
Periodic Reports. Until the earlier of the resale of the Common Shares,
and shares of Common Stock underlying the Warrants by each Subscriber or at
least twelve months after the Warrants have been exercised or have expired, the
Company will (a) use best efforts to continue the listing or quotation of the
Common Stock on the OTC Bulletin Board or such other trading market for the
Common Stock as it may be listed for trading on and (b) file all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act in accordance
with the terms and conditions applicable to such Exchange Act
filings.

    

    5.4     
     Transfer Agent and Certain Legal
Fees. The Company shall continue to engage and maintain, at its expense,
a registrar and transfer agent for its shares of Common Stock for at least such
time as it is required to comply with the covenants set forth in Section 5.3 of
this Agreement. Further, in connection with the request of a Purchaser to sell
Shares or Warrant Shares in compliance with Rule 144 or for the removal of the
restrictive legends which may be imprinted on the certificates representing the
Shares and Warrant Shares held by a Purchaser in accordance with Rule 144, the
Company shall bear the fees and expenses of its securities transfer agent and
its counsel in connection with rendering opinions required by the Company’s
securities transfer agent to the extent that such issuance or transfer is
permissible in accordance with the applicable provisions of Rule
144.

    

    ARTICLE
VI

    MISCELLANEOUS

    

    6.1     
      Survival.  The
representations and warranties set forth in Articles II and III hereof shall
survive the Closing.  No investigation made by or on behalf of either
party shall affect the representations and warranties made pursuant to this
Agreement. No party makes any additional or implied representations other than
those set forth herein.

    

    6.2     
      Expenses.  Each
party hereto shall bear and pay all costs and expenses incurred by it in
connection with the transactions contemplated hereby, including fees and
expenses of its own brokers, finders, financial consultants, accountants and
counsel.

    

    6.3           Entire Agreement. This
Agreement, including the Exhibits, contains the entire agreement and
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior arrangements and understandings between the parties, either
written or oral, with respect to its subject matter.

    

    6.4           Binding Effect of
Subscription. The Purchaser hereby acknowledges and agrees, subject to
any applicable state securities laws that the subscription and application
hereunder are irrevocable, that the Purchaser is not entitled to cancel,
terminate or revoke this Agreement and that this Agreement shall survive the
death or disability of the Purchaser and shall be binding upon and inure to the
benefit of the Purchaser and his heirs, executors, administrators, successors,
legal representatives, and assigns.  If the Purchaser is more than one
person, the obligations of the Purchaser hereunder shall be joint and several,
and the agreements, representations, warranties, and acknowledgments herein
contained shall be deemed to be made by and be binding upon each such person and
his heirs, executors, administrators, successors, legal representatives, and
assigns.

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    6.5      
    Captions. The table of
contents and captions contained in this Agreement are for reference purposes
only and are not part of this Agreement.

    

    6.6   
       Amendments; Waivers. No
provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by the Company and the
Purchasers holding a majority of the Securities subscribed for in the Offering
or, in the case of a waiver, by the party against whom enforcement of any such
waiver is sought (in the case of the Purchasers, such waiver shall be in writing
and approved by a majority of the Purchasers). No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right.

    
      

    

    
      6.7      
    Notices.  Any
notice, demand or other communication which any party hereto may be required, or
may elect, to give to anyone interested hereunder shall be sufficiently given if
(a) deposited, postage prepaid, in a United States mail box, stamped, registered
or certified mail, return receipt requested, addressed to such address as may be
listed on the books of the Company, or, if to the Company, the Company’s
executive office, or (b) delivered personally at such
address.

    

    
      

    

    
      6.8       
   Execution.  This
Agreement may be executed through the use of separate signature pages or in any
number of counterparts, and each of such counterparts shall, or all purposes,
constitute one agreement binding on all parties, notwithstanding that all
parties are not signatories to the same counterpart.

    

    
      

    

    
      6.9       
   Severability;
Assignment.  Each provision of this Agreement is intended to be
severable from every other provisions, and the invalidity or illegality of any
portion hereof, shall not affect the validity or legality of the remainder
hereof. This Agreement is not transferable or assignable by the Purchaser except
as may be provided herein. This Agreement shall be binding upon and inure to the
benefit of the Company, the Purchasers and their respective successors and
permitted assigns.

    

    
      

    

    
      6.10     
   Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Pennsylvania, without regard to the principles of conflicts of law
thereof.  Each party agrees that all proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
Affiliates, employees or agents) shall be commenced exclusively in the state and
federal courts sitting in the State of Pennsylvania (the “Pennsylvania
Courts”). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the Pennsylvania Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any proceeding, any claim that it is not personally subject to the jurisdiction
of any Pennsylvania Court, or that such proceeding has been commenced in an
improper or inconvenient forum. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.  Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby. If either party shall commence a
proceeding to enforce any provisions of this Agreement, then the prevailing
party in such proceeding shall be reimbursed by the other party for its
reasonable attorney’s fees and other reasonable costs and expenses incurred with
the investigation, preparation and prosecution of such
Proceeding.

    

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    

    Signature
pages to Subscription Agreement Follows

    

    SIGNATURE
PAGE TO SUBSCRIPTION AGREEMENT

    

    IN WITNESS WHEREOF, the parties hereto
have executed or caused this Agreement to be executed by their signature as
natural persons or by individuals by their duly authorized officers as of the __
day of ____________, 2010.

    

    
      
        	
                THE
      COMPANY:

              
	 
      
	
                SKINNY
      NUTRITIONAL CORP.:

              
	 
      
	
                   

              
	
                Ronald
      D. Wilson,

              
	
                Chief
      Executive Officer

              

      

    

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    EXECUTION
BY AN INDIVIDUAL

    (Not
applicable to entities)

     

    
      
        
          
            
              
                
                  	
                          IF
      YOU ARE PURCHASING SECURITIES WITH YOUR SPOUSE, YOU MUST BOTH SIGN THIS
      

                          SIGNATURE
      PAGE.

                        

                

              

            

          

        

      

       

      
         PLEASE
INDICATE DESIRED TYPE OF OWNERSHIP OF SECURITIES:

         

      

    

     ̈           Individual

     

     ̈           Joint
Tenants (rights of survivorship)

     

     ̈           Tenants
in Common (no rights of survivorship)

    

    I
represent that the foregoing information is true and correct.

    

    IN WITNESS WHEREOF, the undersigned has
duly executed this Subscription Agreement and agrees to the terms
hereof.

    

    Dated:
__________________ ___, 2010

    

    Subscription
Amount:  $_____________

    

    Number of
Securities to be purchased: _______________

    

    
      
        
          	
                     

                
	
                  (Name
      of Investor - Please Print)

                
	 
      
	
                     

                
	
                  (Signature)

                
	 
      
	
                     

                
	
                  (Name
      of co-Investor - Please Print)

                
	 
      
	
                     

                
	
                  (Signature
      of Co-Investor)

                

        

      

    

     

    
      
        
          	
                  Exact name
      Securities are to be
      issued under:

                	
                     

                
	 
      	 
      
	
                  Address
      for Delivery of Certificates

                	
                     

                
	
                  (if
      not the same as in Questionnaire):

                	 
      
	 
      	
                     

                
	 
      	 
      
	 
      	
                     

                

        

      

    

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    PARTNERSHIP
SIGNATURE PAGE

     

    The
undersigned PARTNERSHIP hereby represents and warrants that the person signing
this Subscription Agreement
on behalf of the PARTNERSHIP is a general partner of the PARTNERSHIP, has been
duly authorized by the PARTNERSHIP to acquire the Securities and sign this Subscription Agreement on behalf
of the PARTNERSHIP and, further, that the undersigned PARTNERSHIP has all
requisite authority to purchase such Securities and enter into the Subscription
Agreement.

     

    IN WITNESS WHEREOF, the undersigned has
duly executed this Subscription Agreement and agrees to the terms
hereof.

    

    Dated:
__________________ _____, 2010

    

    Subscription
Amount:  $_____________

    

    Number of
Shares of Securities to be purchased: _______________

    

    
      
        
          
            
              
                
                  	
                             

                        
	
                          Name
      of Partnership

                        
	
                          (Please
      Type or Print)

                        
	 
	
                          By:

                        	
                             

                        
	 
      	
                          (Signature)

                        
	 	 
	
                          Name:

                        	
                             

                        
	 
      	
                          (Please
      Type or Print)

                        
	 	 
	
                          Title:

                        	
                             

                        
	 
      	
                          (Please
      Type or
Print)

                        

                

              

            

          

        

      

    

     

    
      
        
          	
                  Exact name Securities are to
      be issued under:

                	
                     

                
	 
      	 
      
	
                  Address
      for Delivery of Certificates

                	
                     

                
	
                  (if
      not the same as in Questionnaire):

                	 
      
	 
      	
                     

                
	 
      	 
      
	 
      	
                     

                

        

      

    

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

    CORPORATION/LIMITED
LIABILITY COMPANY SIGNATURE PAGE

     

    The
undersigned CORPORATION or LIMITED LIABILITY COMPANY hereby represents and
warrants that the person signing this Subscription Agreement on behalf
of the CORPORATION or LIMITED LIABILITY COMPANY has been duly authorized by all
requisite action on the part of the CORPORATION or LIMITED LIABILITY COMPANY to
acquire the Securities and sign this Subscription Agreement on behalf
of the CORPORATION or LIMITED LIABILITY COMPANY and, further, that the
undersigned CORPORATION or LIMITED LIABILITY COMPANY has all requisite authority
to purchase the Securities and enter into this Subscription
Agreement.

     

    IN WITNESS WHEREOF, the undersigned has
duly executed this Subscription Agreement and agrees to the terms
hereof.

    

    Dated:
__________________ _____, 2010

    

    Subscription
Amount:  $_____________

    

    Number of
Shares of Securities to be purchased: _______________

    

    
      
        
          
            
              
                
                  	
                             

                        
	
                          Name
      of Corporation

                        
	
                          Or
      Limited Liability Company

                        
	
                          (Please
      Type or Print)

                        
	 
	
                          By:

                        	
                             

                        
	 
      	
                          Signature

                        
	 	 
	
                          Name:

                        	
                             

                        
	 
      	
                          (Please
      Type or Print)

                        
	 	 
	
                          Title:

                        	
                             

                        
	 
      	
                          (Please
      Type or
Print)

                        

                

              

            

          

        

      

    

     

    
      
        
          	
                  Exact name Securities are to
      be issued under:

                	
                     

                
	 
      	 
      
	
                  Address
      for Delivery of Certificates

                	
                     

                
	
                  (if
      not the same as in Questionnaire):

                	 
      
	 
      	
                     

                
	 
      	 
      
	 
      	
                     

                

        

      

    

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    TRUST/RETIREMENT
PLAN SIGNATURE PAGE

     

    The
undersigned TRUST or RETIREMENT PLAN hereby represents and warrants that the
persons signing this Subscription Agreement on behalf
of the TRUST or RETIREMENT PLAN are duly authorized to acquire the Securities
and sign this Subscription
Agreement on behalf of the TRUST or RETIREMENT PLAN and, further, that the
undersigned TRUST or RETIREMENT PLAN has all requisite authority to purchase
such Securities and enter into the Subscription
Agreement.

    

    IN WITNESS WHEREOF, the undersigned has
duly executed this Subscription Agreement and agrees to the terms
hereof.

    

    Dated:
__________________ _____, 2010

    

    Subscription
Amount:  $_____________

    

    Number of
Shares of Securities to be purchased: _______________

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	
                                             

                                        
	
                                          Title
      of Trust or Retirement Plan

                                        
	
                                          (Please
      Type or Print)

                                        
	 
	By:	
                                           

                                        	
                                             

                                        
	 
      	
                                          Signature
      of Trustee or

                                        
	 
      	
                                          Authorized
      Signatory

                                        
	 	 
	
                                          Name
      of Trustee:

                                        	 
      
	 
      	
                                          (Please
      Type or Print)

                                        
	 	 
	By:	
                                           

                                        	
                                             

                                        
	 
      	
                                          Signature
      of Co-Trustee if 

                                          applicable

                                        
	 	 
	
                                          Name
      of Co-Trustee:

                                        	
                                             

                                        
	 
      	
                                          (Please
      Type or
Print)

                                        

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          	
                  Exact name
      Securities are to be
      issued under:

                	
                     

                
	 
      	 
      
	
                  Address
      for Delivery of Certificates

                	
                     

                
	
                  (if
      not the same as in Questionnaire):

                	 
      
	 
      	
                     

                
	 
      	 
      
	 
      	
                     

                

        

      

    

    
      
         

      

      
        31

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