Document:

operating.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    OPERATING
AGREEMENT

    

    This
Operating Agreement (the “Agreement”), is made on May 29, 2009 (the “Effective
Date”) between Shrink Technologies, Inc., a California corporation, (hereinafter
referred to as the “Company”) and BCGU, LLC, a Nevada limited liability company
(the “Consultant”).

    

    WHEREAS, the Company requires
the Services (as defined herein) and as set forth herein;

    

    WHEREAS, Consultant is
qualified to provide the Company with the Services and is desirous to perform
such Services for the Company; and

    

    WHEREAS, the Company wishes to
induce Consultant to provide the Services and wishes to contract with the
Consultant regarding the same and compensate Consultant in accordance with the
terms herein;

    

    NOW, THEREFORE, in
consideration of the mutual covenants hereinafter stated, it is agreed as
follows:

    

    1.           APPOINTMENT.  The Company
hereby engages Consultant and Consultant agrees to render the Services to the
Company as a consultant upon the terms and conditions hereinafter set
forth.

    

    2.           TERM.  Subject to
Section 8(a), the term of this Consulting Agreement shall begin as of the
Effective Date, and shall terminate 12 months thereafter (hereinafter, the
"Term").

    

    3.           SERVICES.  During the term
of this Agreement, Consultant shall provide the Company with the following
“Services.”  Services shall be limited to making recommendations and
offering advice to the Company’s Officers, Directors and other key Company
personnel.    As offsite advisors, Consultant will rely upon
the Company’s management to, in the Company’s sole discretion, accept or reject
its recommendations.  Under no circumstances, even in the event that
Consultant is to perform onsite analysis, shall Consultant be responsible for
making any decisions on behalf of the Company.

    

    a.           Company
wishes for Consultant to:

    

    § Provide
management services;

    § Provide
investor and public relations consulting;

    § Provide
controller and bookkeeping services for the Company and
itssubsidiaries;

    § Provide
administrative support staff, reception, clerical and filing;

    § Provide
support and staffing to prepare the Company’s SEC filings
andReports.

    

    b.           Consultant
agrees to provide the Services on a timely basis via: meetings with Company
representatives which may include other professionals; conferences calls with
Company representatives and other professionals; and/or written correspondence
and documentation.  Consultant cannot guarantee the results on behalf
of the Company, but shall pursue all avenues that it deems reasonable through
its network of contacts.

    

    4.           COMPENSATION.                                           In
connection with this Agreement, the foregoing shall be referred to as
“Compensation.”  All Compensation due to be delivered and/or paid to
Consultant pursuant to this Agreement shall be deemed completely earned, due,
payable and non-assessable as of the date the Compensation is due to or vested
in Consultant.  Compensation shall consist of US $6,000 cash payable
on the 1st day of
every month.

    

    5.           REPRESENTATIONS
AND WARRANTIES OF COMPANY.

    

     The
Company hereby represents, warrants and agrees as follows:

     

    a.           This
Agreement has been authorized, executed and delivered by the Company and, when
executed by the Consultant will constitute the valid and binding agreement of
the Company enforceable against the Company in accordance with its terms, except
as enforcement thereof may be limited by bankruptcy, insolvency or
reorganization, moratorium or other similar laws relating to or affecting
creditors’ rights generally or by general equitable principles.

     

    b.           The
financial statements, audited and unaudited (including the notes thereto)
provided to Consultant, (the “Financial Statements”), will present fairly the
financial position of the Company as of the dates indicated and the results of
operations and cash flows of the Company for the periods specified. Such
Financial Statements will be prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved except as otherwise stated therein.

    

    c.           The
Company is validly organized, existing and with active status under the laws the
State of Nevada.

    

    d.           The
securities to be issued to Consultant, if any, have all been authorized for
issuance and when issued, delivered and tendered to the Consultant by the
Company will be validly issued, fully paid and non-assessable.

     

    e.           Since
date of the most recent of the Financial Statements, there has not been any (A)
material adverse change in the business, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company, (B) transaction
that is material to the Company, except transactions in the ordinary course of
business, (C) obligation that is material to the Company, direct or contingent,
incurred by the Company, except obligations incurred in the ordinary course of
business, (D) change that is material to the Company or in the common shares or
outstanding indebtedness of the Company, or (E) dividend or distribution of any
kind declared, paid, or made in respect of the common shares.

    

    f.           The
Company shall be deemed to have been made a continuing representation of the
accuracy of any and all facts, material information and data which it supplies
to Consultant and acknowledges its awareness that Consultant will rely on such
continuing representation in disseminating such information and otherwise
performing its advisory functions.  Consultant in the absence of
notice in writing from the Company, will rely on the continuing accuracy of
material, information and data supplied by the Company.  Consultant
represents that he has knowledge of and is experienced in providing the
aforementioned services.

    

    6.           INDEMNIFICATION.                                                        The
Company agrees to indemnify the Consultant and hold it harmless against any
losses, claims, damages or liabilities incurred by the Consultant, in connection
with, or relating in any manner, directly or indirectly, to the Consultant
rendering the Services in accordance with the Agreement, unless it is determined
by a court of competent jurisdiction that such losses, claims, damages or
liabilities arose out of the Consultant’s breach of this Agreement, sole
negligence, gross negligence, willful misconduct, dishonesty, fraud or violation
of any applicable law.  Additionally, the Company agrees to reimburse
the Consultant immediately for any and all expenses, including, without
limitation, attorney fees, incurred by the Consultant in connection with
investigating, preparing to defend or defending, or otherwise being involved in,
any lawsuits, claims or other proceedings arising out of or in connection with
or relating in any manner, directly or indirectly, to the rendering of any
Services by the Consultant in accordance with the Agreement (as defendant,
nonparty, or in any other capacity other than as a plaintiff, including, without
limitation, as a party in an interpleader action).  The Company
further agrees that the indemnification and reimbursement commitments set forth
in this paragraph shall extend to any controlling person, strategic alliance,
partner, member, shareholder, director, officer, employee, agent or
subcontractor of the Consultant and their heirs, legal representatives,
successors and assigns.  The provisions set forth in this Section
shall survive any termination of this Agreement.

    

    7.           COMPLIANCE
WITH SECURITIES LAWS.  The Company
understands that any and all compensation outlined in this Agreement shall be
paid solely and exclusively as consideration for the aforementioned consulting
efforts made by Consultant on behalf of the Company as an independent
contractor.  The Parties to be performing the services outlined in
this Agreement are natural persons.  Consultant has been engaged to
provide the Company with traditional “public company” business, technical and
related business services.  Consultant’s engagement does not involve
the marketing of any Company securities nor is Consultant being hired to raise
money for the Company.

    

    8.           MISCELLANEOUS.

    

    a.           Termination:  This
Agreement may be terminated by either Party for any reason at any time
(hereinafter referred to as a “Termination”).

    

    b.           Modification:  This
Agreement sets forth the entire understanding of the Parties with respect to the
subject matter hereof.  This Agreement may be amended only in writing
signed by both Parties.

    

    c.           Notices:  Any
notice required or permitted to be given hereunder shall be in writing and shall
be mailed or otherwise delivered in person to the Parties at the addresses set
forth above.

    

    d.           Waiver:  Any
waiver by either party of a breach of any provision of this Agreement shall not
operate as or be construed to be a waiver of any other breach of that provision
or of any breach of any other provision of this Agreement.  The
failure of a party to insist upon strict adherence to any term of this
Consulting Agreement on one or more occasions will not be considered a waiver or
deprive that party of the right thereafter to insist upon adherence to that term
of any other term of this Consulting Agreement.

    

    e.           Assignment:  Compensation
under this Agreement is assignable at the sole discretion of the
Consultant.

    

    f.           Severability:  If
any provision of this Agreement is invalid, illegal, or unenforceable, the
balance of this Consulting Agreement shall remain in effect.  If any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.  If any
compensation provision is deemed unenforceable or illegal, then in the case of
the delivery of common stock to the Consultant, Consultant shall be entitled to
receive a cash benefit equal to the value of the common stock that would have
been tendered had such a provision not been illegal or
unenforceable.

    

    g.           Arbitration:  Any
dispute or other disagreement arising from or out of this Agreement shall be
submitted to arbitration under the rules of the American Arbitration Association
and the decision of the arbiter(s) shall be enforceable in any court having
jurisdiction thereof.  Arbitration shall occur only in San Diego
County, CA.  The interpretation and the enforcement of this Agreement
shall be governed by California Law as applied to residents of the State of
California relating to contracts executed in and to be performed solely within
the State of California.

    

    h.           Governing
Law:  The subject matter of this Agreement shall be governed by
and construed in accordance with the laws of the State of California (without
reference to its choice of law principles), and to the exclusion of the law of
any other forum, without regard to the jurisdiction in which any action or
special proceeding may be instituted.  EACH PARTY HERETO AGREES TO
SUBMIT TO THE PERSONAL JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS
LOCATED IN THE COUNTY OF SAN DIEGO, CALIFORNIA FOR RESOLUTION OF ALL DISPUTES
ARISING OUT OF, IN CONNECTION WITH, OR BY REASON OF THE INTERPRETATION,
CONSTRUCTION, AND ENFORCEMENT OF THIS AGREEMENT, AND HEREBY WAIVES THE CLAIM OR
DEFENSE THEREIN THAT SUCH COURTS CONSTITUTE AN INCONVENIENT FORUM.  AS
A MATERIAL INDUCEMENT FOR THIS AGREEMENT, EACH PARTY SPECIFICALLY WAIVES THE
RIGHT TO TRIAL BY JURY OF ANY ISSUES SO TRIABLE.   If it becomes
necessary for any party to institute legal action to enforce the terms and
conditions of this Agreement, the prevailing party shall be awarded reasonable
attorneys fees, expenses and costs.

    

    i.           Specific
Performance:  The Company and the Consultant shall have the
right to demand specific performance of the terms, and each of them, of this
Agreement.

    

    j.           Execution of the
Agreement:  The Company, the party executing this Agreement on
behalf of the Company, and the Consultant, have the requisite corporate power
and authority to enter into and carry out the terms and conditions of this
Agreement, as well as all transactions contemplated hereunder. All corporate
proceedings have been taken and all corporate authorizations and approvals have
been secured which are necessary to authorize the execution, delivery and
performance by the Company and the Consultant of this Agreement.  This
Agreement has been duly and validly executed and delivered by the Company and
the Consultant and constitutes a valid and binding obligation, enforceable in
accordance with the respective terms herein.  Upon delivery of this
Agreement, this Agreement, and the other agreements and exhibits referred to
herein, will constitute the valid and binding obligations of Company, and will
be enforceable in accordance with their respective terms.  Delivery
may take place via facsimile transmission.

    

    k.           Joint Drafting and Reliance
on Independent Counsel.  This Agreement shall be deemed to have
been drafted jointly by the Parties hereto, and no inference or interpretation
against any one party shall be made solely by virtue of such party allegedly
having been the draftsperson of this Agreement.  The Parties have each
conducted sufficient and appropriate due diligence with respect to the facts and
circumstances surrounding and related to this Agreement.  The Parties
expressly disclaim all reliance upon, and prospectively waive any fraud,
misrepresentation, negligence or other claim based on information supplied by
the other Party, in any way relating to the subject matter of this
Agreement.  Company
was apprised of conflicts of interest between Mark L. Baum, Esq. (“Baum”) and
James B. Panther II and their related controlled entities.  Baum is
also a licensed attorney in the State of California.  Pursuant to the
California Rules of Professional Conduct, Company was advised by Baum to have
independent legal counsel review the Agreement prior to its execution by the
Company.  The Company did in fact take advantage of the advice of
legal counsel other than Baum prior to executing this Agreement.

    

    l.           Acknowledgments and
Assent.  The Parties acknowledge that they have been given at
least ten (10) days to consider this Agreement and that they were advised to
consult with an independent attorney prior to signing this Agreement and that
they have in fact consulted with counsel of their own choosing prior to
executing this Agreement.  The Parties may revoke this Agreement for a
period of three (3) days after signing this Agreement, and the Agreement shall
not be effective or enforceable until the expiration of this three (3) day
revocation period.  The Parties agree that they have read this
Agreement and understand the content herein, and freely and voluntarily assent
to all of the terms herein.

    

    SIGNATURE
PAGE

    

    IN
WITNESS WHEREOF, this Agreement has been executed by the Parties as of the date
first above written.

    

    

    
      	
               SHRINK
      TECHNOLOGIES, INC.

               

               

               

              _________________________________

              By:  Mark
      L. Baum

                 Its:  CEO

            	
              BCGU,
      LLC

               

               

               

              ___________________________________

              By:  James
      B. Panther, II

              Its:   Managing
      Director

            

    

    

    

    

    A FACSIMILE COPY OF THIS AGREEMENT
SHALL HAVE THE SAME LEGAL EFFECT AS AN ORIGINAL OF THE SAME.noteexchange.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    NOTE
EXCHANGE AGREEMENT

    

    THIS AGREEMENT (the “Agreement”) is
effective as of May 29, 2009 (the “Effective Date”) by
and between Shrink Nanotechnologies, Inc., a Delaware corporation f/k/a
AudioStocks, Inc. (the “Company”) and Noctua
Fund LP (“Noctua”).  The
Company and Noctua may be individually referred to herein as a “Party” and
collectively as the “Parties.”

    

    RECITALS

    

    WHEREAS,
as of the Effective Date, the Company acquired all of the equity ownership of
Shrink Technologies, Inc., a California corporation (“Shrink”) pursuant to
a Share Exchange Agreement, resulting in Shrink becoming a wholly owned
subsidiary of the Company (“Shrink Acquisition”);
and

    

    WHEREAS,
Noctua is a creditor of the Company, and, prior to the date hereof and among
other securities of the Company, owns a $100,000 Principal Amount of promissory
note, which accrues interest at a rate of fourteen percent (14%) per annum
commencing October 1, 2009 (the “Existing Note”) which
Existing Note was issued to Noctua in an exchange transaction on May 7, 2009
whereupon Noctua exchanged certain other securities of the Company and agreed to
the discharged of certain obligations owed by the
Company;  and

    

    WHEREAS,
Noctua owns (i) a $91,000 face amount promissory note of Shrink issued in 2008,
(ii) a $10,000 principal amount of note of Shrink issued on March 31, 2009,
(iii) as well as an additional $10,000  note issued on April 23, 2009
(collectively, the “Noctua-Shrink
Notes”); and

    

    WHEREAS,
Noctua has agreed to consent to the Shrink Acquisition hereby and to exchange
its Noctua-Shrink Notes (inclusive of all interest capitalized thereon and
rights relating thereto) in exchange for a new note issued by the Company, with
terms identical in all material respects to those of the Existing Note (the
“New Note” and,
together with the Existing Note, the “Noctua
Notes”),

    

    NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement,
and for good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed as follows:

    

    AGREEMENT

    

    1.           Exchange and
Release.

    

    a.           Noctua
hereby consents to the entry of the parties into the Share Exchange Agreement,
and consummation of the Shrink Acquisition thereby (and, resulting change in
control of Shrink) and, hereby waives any rights or remedies or defaults, common
law or otherwise as against any of the parties in connection with the taking of
any of the actions relating to the consummation thereof.

    

    b.           Noctua
hereby tenders the Noctua-Shrink Notes to the Company and, hereby further
consents to the exchange of its Noctua-Shrink Notes of Shrink along with all
interest or principal thereon totaling $188,121.28 as of the Effective Date, for
the issuance by the Company of the New Note to be issued in exchange therefore
in the principal amount of $118,121.28.  The New Note shall be
identical in form and substance to the Existing Note, with the exception of the
issuance date.

    

    c.           Noctua
hereby discharges Shrink from any and all obligations relating to the
Noctua-Shrink Notes and any liabilities or obligations relating thereto and
accepts the New Note in  exchange therefore.

    

    2.           Waiver of Section
1542.     In signing this Agreement, Noctua has
been advised of, understands and knowingly waives his rights under California
Civil Code Section 1542 which provides as follows: A GENERAL RELEASE DOES NOT
EXTEND TO OBLIGATIONS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

    

    3.           No Further
Obligations.     Noctua covenants and agrees
never to commence against the Company or Shrink, any legal action or proceeding
based in whole or in part upon the Services, Obligations, demands, allegations,
and/or injuries released in this Agreement.

    

    4.           No
Admission.    This Agreement shall not be considered
as an admission of liability by either Party and by entering into this
Agreement, neither Party has admitted the validity of any Obligations herein
released.

    

    5.           Compliance with Securities
Laws.    In the event of a conversion of the New
Note, Noctua understands that the New Note and shares of Common Stock of the
Company issuable thereunder are characterized as “restricted securities” under
the federal securities laws and that under such laws and applicable regulations
such securities may be resold without registration under the United States
Securities Act of 1933, as amended only in certain limited circumstances. It
understood that the certificates evidencing the New Note and any Common Stock
issuable upon conversion thereof, will bear a legend in substantially the below
form:

    

    “THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR A LEGAL OPINION THAT SUCH REGISTRATION IS
NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.”

    

    In
addition, the Noctua hereby represents and warrants that they are an “accredited
investor” as such term is defined in the Securities Act of 1933 and Securities
and Exchange Act of 1934.

    

    6.           Miscellaneous.

    

    a.           Necessary
Acts.  Each Party to this Agreement agrees to perform any
further acts and execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.

    

    b.           Entire Agreement;
Modifications; Waiver.  This Agreement constitutes the entire
agreement between the Parties pertaining to the subject matter contained in it.
This Agreement supersedes all prior and contemporaneous agreements,
representations, and understandings of the Parties.  No supplement,
modification, or amendment of this Agreement shall be binding unless executed in
writing by all the Parties.  No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver.  No waiver shall be binding unless executed in writing by the
Party making the waiver.

    

    c.           Dispute
Resolution.   The subject matter of this Agreement shall
be governed by and construed in accordance with the laws of the State of
California (without reference to its choice of law principles), and to the
exclusion of the law of any other forum, without regard to the jurisdiction in
which any action or special proceeding may be instituted.  EACH PARTY
HERETO AGREES TO SUBMIT TO THE PERSONAL JURISDICTION AND VENUE OF THE STATE
AND/OR FEDERAL COURTS LOCATED IN THE NORTH COUNTY OF SAN DIEGO, CALIFORNIA FOR
RESOLUTION OF ALL DISPUTES ARISING OUT OF, IN CONNECTION WITH, OR BY REASON OF
THE INTERPRETATION, CONSTRUCTION, AND ENFORCEMENT OF THIS AGREEMENT, AND HEREBY
WAIVES THE CLAIM OR DEFENSE THEREIN THAT SUCH COURTS CONSTITUTE AN INCONVENIENT
FORUM.  AS A MATERIAL INDUCEMENT FOR THIS AGREEMENT, EACH PARTY
SPECIFICALLY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY ISSUES SO
TRIABLE.

    

    d.           Attorney’s
Fees.   Should any Party hereto employ an attorney for the
purpose of enforcing or constituting this Agreement, or any judgment based on
this Agreement, in any legal proceeding whatsoever, including insolvency,
bankruptcy, arbitration, declaratory relief or other litigation, the prevailing
party shall be entitled to receive from the other Party or Parties thereto
reimbursement for all reasonable attorneys’ fees and all reasonable costs,
including but not limited to service of process, filing fees, court and court
reporter costs, investigative costs, expert witness fees, and the cost of any
bonds, whether taxable or not, and that such reimbursement shall be included in
any judgment or final order issued in that proceeding.  The
“prevailing party” means the party determined by the court to most nearly
prevail and not necessarily the one in whose favor a judgment is
rendered.

    

    e.           No Oral Change;
Waiver.  This Agreement may only be changed, modified, or
amended in writing by the mutual consent of the Parties hereto.  The
provisions of this Agreement may only be waived in or by writing signed by the
Party against whom enforcement of any waiver is sought.

    

    f.           Severability.  If
any provision of this Agreement is invalid, illegal, or unenforceable, the
balance of this Agreement shall remain in effect.  If any provision is
inapplicable to any person or circumstance, it shall nevertheless remain
applicable to all other persons and circumstances.

    

    g.           Execution of the
Agreement.  The Company and Noctua, have the requisite
corporate power and authority to enter into and carry out the terms and
conditions of this Agreement, as well as all transactions contemplated
hereunder. All corporate proceedings have been taken and all corporate
authorizations and approvals have been secured which are necessary to authorize
the execution, delivery and performance by the Company and Noctua of this
Agreement.  This Agreement has been duly and validly executed and
delivered by the Company and Noctua and constitutes a valid and binding
obligation, enforceable in accordance with the respective terms
herein.  Upon delivery of this Agreement, this Agreement, and the
other agreements and exhibits referred to herein, will constitute the valid and
binding obligations of Company, and will be enforceable in accordance with their
respective terms.

    

    h.           Joint Drafting and Exclusive
Agreement.  This Agreement is the only Agreement executed by
and between the Parties related to the Obligations described
herein.  There are no additional oral agreements or other
understandings related to the Obligations described herein.  This
Agreement shall be deemed to have been drafted jointly by the Parties hereto,
and no inference or interpretation against any one Party shall be made solely by
virtue of such Party allegedly having been the draftsperson of this
Agreement.  The Parties have each conducted sufficient and appropriate
due diligence with respect to the facts and circumstances surrounding and
related to this Agreement.  The Parties expressly disclaim all
reliance upon, and prospectively waive any fraud, misrepresentation, negligence
or other claim based on information supplied by the other Party, in any way
relating to the subject matter of this Agreement.

    

    i.           Conflicts of
Interest.  The Parties shall exercise their best efforts to the
other Party aware of any conflicts of interest that exist between such Party,
including any other business of entity that such Party beneficially owns or
controls, and any interest of the other Party.  Disclosure of such
conflicts of interest shall be made in writing on the attached “Schedule
A.”  Acknowledgement of such conflicts of interest and waiver
of any cause of action against a Party related to a conflict of interest may be
made in writing or through oral communication.

    

    j.           Acknowledgments and
Assent.  The Parties acknowledge that they have been given at
least ten (10) days to consider this Agreement and that they were advised to
consult with an independent attorney prior to signing this Agreement and that
they have in fact consulted with counsel of their own choosing prior to
executing this Agreement.  The Parties may revoke this Agreement for a
period of three (3) calendar days after signing this Agreement, and the
Agreement shall not be effective or enforceable until the expiration of this
three (3) day revocation period.  The Parties agree that they have
read this Agreement and understand the content herein, and freely and
voluntarily assent to all of the terms herein.

    

    

    ***SIGNATURE
PAGE FOLLOWS***

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SIGNATURE
PAGE

    

    IN
WITNESS WHEREOF the Parties have executed this Agreement effective as of the day
and year first above written.

    

    
      	
              Shrink
      Nanotechnologies, Inc.

            	
              Noctua
      Fund LP

            
	
               

               

               

              ___________________________________

            	
               

               

               

              ___________________________________

            
	
              By:
      Luis Leung

            	
              By:
      James B. Panther, II

            
	
              Its:
      President and CEO

            	
              For:
      Noctua Fund Manager, LLC

            
	 
      	
              General
      Partner of Noctua Fund LP

            
	 
      	 
      

    

    

    

    A
FACSIMILE COPY OF THIS AGREEMENT SHALL HAVE THE SAME LEGAL EFFECT AS AN ORIGINAL
OF THE SAME.

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    
      
        
          

          ________Noctua _______Company

          Page  of  [INSERT
PAGE NUMBER]

        

         

      

      
         

        
          

        

      

      
         

        
          Shrink
Nanotechnologies, Inc.

          Note
Exchange Agreement

          May 29,
2009

          

          

        

      

    

    SCHEDULE
A

    CONFLICTS
OF INTEREST

    

    

    Relationships of Luis J.
Leung:

    among
other relations or transactions that may occur from time to time:

    
      	
              ·  

            	
              President
      and Chief Executive Officer of Shrink Nanotechnologies,
    Inc.

            

    

    
      	
              ·  

            	
              Sole
      executive officer of Shrink Nanotechnologies,
  Inc.

            

    

    
      	
              ·  

            	
              Sole
      Director of Shrink Nanotechnologies,
Inc.

            

    

    
      	
              ·  

            	
              CEO
      of DAO Information Systems, Inc. (“DAO, Inc.”),
      which acquired certain assets from Shrink Nanotechnologies,
      Inc.

            

    

    
      	
              ·  

            	
              60%
      Equity Member of DAO Information Systems, LLC, which owns 100% of DAO,
      Inc.

            

    

    

    Relationships of Noctua Fund
LP:

    among
other relations or transactions that may occur from time to time:

    
      	
              ·  

            	
              Noctua
      Fund Manager, LLC is jointly owned by entities which are beneficially
      owned and controlled by Mark L. Baum (“Baum”) and
      James B. Panther, II (“Panther”)

            

    

    
      	
              ·  

            	
              Baum
      and Panther have most recently disclosed their respective ownership
      interests in the Company on April 20, 2009 and April 21, 2009 in Amended
      Form 13Ds and Form 3s, filed with the
SEC.

            

    

    
      	
              ·  

            	
              Baum
      and Panther collectively control the voting interests (through common
      shares and the Company’s Series A Preferred Stock) of the
      Company.

            

    

    
      	
              ·  

            	
              Noctua
      Fund LP is a 40% Equity Member of DAO Information Systems, LLC, which owns
      100% of DAO, Inc.

            

    

    
      	
              ·  

            	
              Noctua
      Fund LP beneficially owns 100 shares of the Company’s Series C Preferred
      stock.

            

    

    
      	
              055422/00000
      Business 6805848v1

            

    

    
      	
              ·  

            	
              Mr.
      Panther and Mr. Baum are owners of entities that are party to both an
      Operating Agreement with Shrink Technologies, Inc., and a Sublease
      Agreement with Shrink Technologies, Inc., and shall receive remuneration
      therefore.

            

    

    

    
      
        
          

          ________Noctua _______Company

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