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    SETTLEMENT
AGREEMENT

     

    This is a
binding Settlement Agreement made and entered into effective as of the 1st day
of May, 2009 by and among Christopher D. Larson (“Larson”), National Cash &
Credit, LLC, a Minnesota limited liability company, Western Capital Resources,
Inc., a Minnesota corporation, Wyoming Financial Lenders, Inc., a Wyoming
corporation, WERCS, Inc., a Wyoming corporation, and John
Quandahl.  The parties to this Agreement will be referred to
individually as a “Party” and collectively as “Parties.”

     

    ADDITIONAL
DEFINITIONS

     

    1.           “Affiliate” means,
with respect to any particular person or entity, each person or entity that
controls, is controlled by, or is under common control with, such particular
person or entity.

     

    2.           “Agreement” means this
Settlement Agreement.

     

    3.           “Claims” means any and
all claims, counterclaims, cross-claims, disputes, demands, actions and causes
of action, petitions, suits, debts, liabilities, defenses, obligations, damages
(whether general, special, punitive, statutory, or other), penalties, costs,
losses, expenses, and reasonable fees (including without limitation, attorneys’,
accountants’, auditors’ and consultants’ fees - whether such fees were incurred
prior to or after the date of the Agreement), whether known or unknown,
liquidated or unliquidated, fixed or contingent, direct or indirect, suspected
or unsuspected, premised on direct recovery, contribution, or indemnity, whether
based on contract, tort, statute, or other legal or equitable theory of
recovery, whether written or oral, among or between the Parties that as of the
date of this Agreement: (1) were raised or could have been raised by any of the
Western Parties against any of the Larson Parties or in defense thereto; or (2)
were raised or could have been raised by any of the Larson Parties against any
of the Western Parties or in defense thereto; provided, however, that Excluded
Claims shall not be included
within the definition of “Claims” used herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
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    4.           “Exchange Agreement”
means the February 26, 2008 Exchange Agreement by and among Western, NCC and the
members of NCC, along with all exhibits, schedules and addenda
thereto.

     

    5.           “Excluded Claims”
means any and all claims, counterclaims, cross-claims, disputes, demands,
actions and causes of action, petitions, suits, debts, liabilities, defenses,
obligations, damages (whether general, special, punitive, statutory, or other),
penalties, costs, losses, expenses, and attorneys’ fees (whether incurred prior
to or after the date of the Agreement), whether known or unknown, liquidated or
unliquidated, fixed or contingent, direct or indirect, suspected or unsuspected,
premised on direct recovery, contribution, or indemnity, whether based on
contract, tort, statute, or other legal or equitable theory of recovery, whether
written or oral, among or between the Parties that relate to or arise in
connection with:

     

    a.           WERCS’
obligations under the Indemnification Agreement;

     

    b.           Western’s
obligations under Section 4 and Section 5 of the Redemption Agreement;
and

     

    c.           A
breach by any Party of any of the provisions of this Agreement.

     

    6.           “Larson Parties” means
Larson and NCC, and the Affiliates of each of them.  For clarity, the
“Affiliates” of Larson and NCC include WCR Acquisition Co., a Minnesota
corporation to which assets formerly held by STEN Corporation and its affiliates
were transferred effective as of July 31, 2008, but does not include Steve Staehr or
David Stueve.

     

    
      
        
        

      

      
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    7.           “Merger Agreement”
means the December 13, 2007 Agreement and Plan of Merger and Reorganization by
and among Western, WFL Acquisition Corp. and Wyoming, a copy of which is
attached as Exhibit 2.1 to Western’s Form 8-K filed with the Securities and
Exchange Commission on December 14, 2007, along with all exhibits,
schedules and addenda thereto.

     

    8.           “NCC” means National
Cash & Credit, LLC, a Minnesota limited liability company, and any of its
present or former agents, employees, representatives and all other persons who
have acted or purported to act on its behalf.

     

    9.           “Quandahl” means John
Quandahl, presently the Chief Executive Officer of Western and a shareholder of
Western.

     

    10.         “Redemption Agreement”
means the December 31, 2008 Redemption Agreement by and among Larson, Western,
and NCC, along with all exhibits, schedules and addenda thereto.

     

    11.         “WERCS” means WERCS,
Inc., a Wyoming corporation, and any of its present or former agents, employees,
representatives and all other persons who have acted or purported to act on its
behalf.

     

    12.         “Western” means
Western Capital Resources, Inc., a Minnesota corporation, f/k/a Uron Inc., and
any of its present or former agents, employees, representatives and all other
persons who have acted or purported to act on its behalf.

     

    13.         “Western Parties”
means Western, Wyoming, WERCS, and the Affiliates of each of
them.  For clarity, the “Affiliates” of the Western Parties include
the directors and officers of Western.

     

    14.         “Wyoming” means
Wyoming Financial Lenders, Inc., a Nebraska corporation, and any of its present
or former agents, employees, representatives and all other persons who have
acted or purported to act on its behalf.

     

    
      
        
        

      

      
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    RECITALS

     

    WHEREAS,
Western has made certain allegations against the Larson Parties;

     

    WHEREAS,
the Larson has made certain allegations against the Western
Parties;

     

    WHEREAS,
the applicable Parties have either denied the allegations made against them,
denied that valid Claims exist based on those allegations, or both;
and

     

    WHEREAS,
the Parties desire to avoid the uncertainties, risks and expenses that would
accompany any litigation and further investigation and to compromise, settle,
and release, once and forever, the Claims by and among the Parties as set forth
herein.

     

    AGREEMENT

     

    NOW,
THEREFORE, in consideration of the covenants, mutual releases and other terms
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which the Parties hereby acknowledge, the Parties
hereby agree as follows:

     

    1.           Incorporation of Definitions
and Recitals.  The above definitions and recitals are
incorporated into this Agreement by reference.

     

    2.           Denial of
Liability.  This Agreement is entered into only for purposes of
settlement and compromise of the matters covered by this Agreement in order to
avoid the uncertainties, risks and expenses that would accompany any litigation
among the Parties.  Neither this Agreement, nor anything contained
herein, nor any act or thing done in connection herewith, is intended to be, or
shall be construed or deemed to be, an admission by any of the Parties of any
liability, fault or wrongdoing.

     

    
      
        
        

      

      
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    3.           Transfer of Uncollectible
Debt by Wyoming.  As consideration for the compromise and
settlement set forth herein, and subject to all of the terms and conditions
contained herein, Wyoming hereby sells, transfers and assigns to NCC, those
certain assets classified as uncollectible debt identified on Exhibit A that were
held by WCR Acquisition Co. as of December 31, 2008, prior to the transfers to
Larson pursuant to the terms of the Redemption Agreement (the “Bad Debt
Assets”).  Wyoming represents and warrants to NCC that the Bad Debt
Assets are all of the presently uncollected debt held by it that were owned by
WCR Acquisition Co. prior to effecting the transactions contemplated by the
Redemption Agreement.

     

    4.           Intentionally
Omitted.

     

    5.           Redemption of Western
Shares.  As consideration for the compromise and settlement set
forth herein, and subject to all of the terms and conditions contained herein
(specifically including but not limited to the escrow arrangement described in
Section 29 below), Western hereby redeems 550,000 shares of common stock of
Western presently held in the name of Larson (representing 100% of the ownership
interest of Larson in Western) (such transaction, the “Redemption” and such
shares, the “Redeemed Shares”), and Larson hereby sells and assigns to Western
all of Larson’s rights, title to and interest in the Redeemed Shares free and
clear of any and all liens, pledges, security interests, transfer restrictions
or encumbrances of any kind.  In furtherance of the Redemption, Larson
is executing and delivering to the Escrow Agent (as defined in Section 29
below), concurrently with this Agreement, a medallion guaranteed stock power
with respect to the Redeemed Shares, in the form attached hereto as Exhibit B, and his
stock certificate representing the Redeemed Shares.

     

    
      
        
        

      

      
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    6.           Covenant Regarding
Indemnification Rights.  The Parties acknowledge and agree that
Larson may be entitled to certain indemnification rights under (i) applicable
law, (ii) insurance policies held by Western, (iii) Western’s articles of
incorporation and bylaws, and (iv) the Indemnification
Agreement.  Western hereby agrees to provide to Larson, as soon as
reasonably possible but in no event later than five (5) business days from the
date of this Agreement, copies of all insurance policies under which Larson may
have coverage for any actions or omissions taken by Larson while he was either
an officer or director of Western or otherwise covered under Western’s insurance
policies, including without limitation all directors and officers insurance
policies.  The Western Parties agree that they will not take, and will
not permit any of their Affiliates to take, any action that interferes with,
impairs, or alters (in an adverse manner), or is intended to interfere with,
impair, or alter (in an adverse manner), any of Larson’s bona fide rights to
claim or receive indemnification under Western’s articles of incorporation,
bylaws or otherwise.

     

    7.           Affirmation Regarding
Indemnification Agreement and Redemption Agreement.  The
Parties hereby affirm that the terms of the Indemnification Agreement are, and
shall remain, in full force and effect on the terms set forth therein and the
parties to the Indemnification Agreement agree to abide by their obligations
under the Indemnification Agreement.  The Parties hereby affirm that
the terms of Section 4 and Section 5 of the Redemption Agreement are, and shall
remain, in full force and effect and the parties to the Redemption Agreement
hereby agree to abide by their obligations under Section 4 and Section 5 of the
Redemption Agreement.

     

    8.           Release By the Larson
Parties.  For and in consideration of the performance by the
Western Parties of their respective obligations under this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Larson and NCC hereby do unconditionally and irrevocably,
fully, finally, and forever waive, release, acquit and forever discharge the
Western Parties and Quandahl from any and all Claims, and covenant and agree
that none of the Larson Parties will institute or, unless legally compelled,
participate in any Claims (including Claims brought by third parties) against
the Western Parties and/or Quandahl.

     

    
      
        
        

      

      
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    9.           Release By the Western
Parties.  For and in consideration of the performance by the
Larson Parties of their respective obligations under this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Western, Wyoming, WERCS and Quandahl hereby do
unconditionally and irrevocably, fully, finally, and forever waive, release,
acquit and forever discharge the Larson Parties from any and all Claims, and
covenant and agree that none of the Western Parties will institute or, unless
legally compelled, participate in any Claims (including Claims brought by third
parties) against the Larson Parties.

     

    10.           Non-Disparagement.  Except
as may be required by applicable law, regulation or court order (including
administrative subpoenas), each of the Parties agrees that they will not make,
or cause or attempt to cause any other person or entity to make, any statements,
either written or oral, or convey any information about the other Parties (or
their owners, employees, or Affiliates) to any third party which is disparaging
or which in any way reflects negatively upon the character, personality,
integrity or performance of such Party (or its owners, employees, or
Affiliates), or which are directly or indirectly damaging to the reputation of
such Party (or its owners, employees, or Affiliates); provided, however, that
notwithstanding anything to the contrary contained herein, (a) Western shall be
entitled to include and provide accurate disclosures in any public filings,
including filings made with the SEC, and (b) Western shall be entitled to
respond in a factual manner to specific requests for information from any
governmental authority.

     

    
      
        
        

      

      
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    11.           No Waiver of Attorney-Client
Privilege.  The Parties stipulate that no Party has waived the
attorney-client privilege.

     

    12.           Acknowledgement of
Claims.  The Parties acknowledge that their Claims may be
different from or greater than the Claims currently known to them.  It
is the Parties’ intention to release and waive all such Claims, whether
currently known or unknown to them to the extent provided herein.

     

    13.           Merger and
Integration.  The Parties agree and acknowledge that this
Agreement, together with all exhibits hereto, constitutes the entire agreement
of the Parties with respect to the subject matter contained
herein.  There are no other agreements, representations, warranties,
or other understandings between or among the Parties with regard to the subject
matter hereof which are not set forth in this Agreement or exhibits
hereto.  To the extent other agreements, representations, warranties,
or other understandings between the Parties with regard to the subject matter
hereof exist, those agreements are hereby repudiated and shall have no further
force or effect.  This Agreement is made and entered into without any
reliance on any statement, promise, inducement, or consideration not recited in
this Agreement.

     

    14.           No Mistake of Fact; No
Representations.  The Parties agree and acknowledge that this
Agreement shall not be subject to any claim of mistake of fact.  The
terms of this Agreement are contractual and not a mere recital, and merge all
prior discussions, agreements, and transactions of all kinds pertaining to the
matters discussed in this Agreement.  Other than as specifically set
forth herein, there are no representations or warranties that the Parties have
relied upon in entering into this Agreement.

     

    15.           Agreement Jointly
Drafted.  The Parties agree that this Agreement shall not be
construed against any Party to the Agreement on the grounds that such Party
drafted this Agreement, but shall be construed as if all Parties jointly
prepared this Agreement, and any uncertainty or ambiguity shall not on that
ground be interpreted against any one Party.

     

    
      
        
        

      

      
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    16.           Advice of Counsel
Obtained.  Each of the Parties acknowledges and represents that
he or it has had the opportunity to consult with legal, financial, and other
professional advisors as he or it deems appropriate in connection with his or
its consideration and execution of this Agreement.  Each undersigned
Party further represents and declares that in executing this Agreement, he or it
has relied solely upon his or its own judgment, belief and knowledge, and the
advice and recommendation of his or its own professional advisors, concerning
the nature, extent and duration of its rights, obligations and claims; that he
or it has reviewed his or its records, evaluated his or its position and
conducted due diligence with regard to all rights, claims, or causes of action
whatsoever with respect to any and all other Parties; and that he or it has not
been influenced to any extent whatsoever in executing this Agreement by any
representations or statements made by the other party or his or its
representatives, except those expressly contained or referred to
herein.

     

    17.           Choice of
Law.  This Agreement shall be construed and enforced in
accordance with the laws of the State of Minnesota without giving effect to
principles of conflicts of law thereof.

     

    
      
        
        

      

      
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    18.           Dispute
Resolution.  To the greatest extent possible, the Parties will
endeavor to resolve any disputes relating to this Agreement through amicable
negotiations.  Failing an amicable settlement, any controversy, claim
or dispute arising under or relating to this Agreement, including the existence,
validity, interpretation, performance, termination or breach of this Agreement,
will finally be settled by binding arbitration before a single arbitrator (the
“Arbitration Tribunal”) which will be jointly appointed by the involved
Parties.  The Arbitration Tribunal will self-administer the
arbitration proceedings utilizing the Commercial Rules of the American
Arbitration Association; provided, however, the American Arbitration Association
shall not be involved in administration of the arbitration.  The
arbitrator must be a retired judge of a state or federal court of the United
States or a licensed lawyer with at least ten years of corporate or commercial
law experience and have at least an AV rating by Martindale
Hubbell.  If the involved Parties cannot agree on an arbitrator, any
party may request the American Arbitration Association or a court of competent
jurisdiction to appoint an arbitrator, which appointment will be
final.

     

    The arbitration will be held in Omaha,
Nebraska.  Each party will have discovery rights as provided by the
Federal Rules of Civil Procedure within the limits imposed by the arbitrator;
provided, however, that all such discovery will be commenced and concluded
within 60 days of the selection of the arbitrator.  It is the intent
of the Parties that any arbitration will be concluded as quickly as reasonably
practicable.  Once commenced, the hearing on the disputed matters will
be held four days a week until concluded, with each hearing date to begin at
9:00 a.m. and to conclude at 5:00 p.m.  The arbitrator will use all
reasonable efforts to issue the final written report containing award or awards
within a period of five business days after closure of the
proceedings.  Failure of the arbitrator to meet the time limits of
this Section will not be a basis for challenging the award.  The
Arbitration Tribunal will not have the authority to award punitive damages to
either party.  Each party will bear its own expenses, but the involved
Parties will share equally the expenses of the Arbitration
Tribunal.  The Arbitration Tribunal shall award attorneys’ fees and
other related costs payable by the losing party to the successful party as it
deems equitable.  This Agreement will be enforceable, and any
arbitration award will be final and non-appealable, and judgment thereon may be
entered in any court of competent jurisdiction.

     

    
      
        
        

      

      
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    Notwithstanding the foregoing, the
Parties hereby agree that State and Federal Courts located in the State of
Minnesota shall have exclusive jurisdiction to enforce arbitration awards and to
provide equitable relief for the breach of covenants made in this
Agreement.

    

    19.           Severability.  If
any of the provisions, terms, clauses, or waivers or releases of claims or
rights contained in this Agreement are declared illegal, unenforceable, or
ineffective in a legal or other forum or proceeding, the Parties agree to
negotiate in good faith substitute provisions, terms, clauses, or waivers or
releases that would have, to the maximum extent possible, identical effect and
that would be enforceable.

    

    20.           Writing
Required.  This Agreement may not be altered or amended except
in writing signed by the Parties.

    

    21.           No
Waiver.  The failure of any Party at any time to require
performance of any provisions hereof shall in no manner affect the right to
enforce the same.  No waiver by any Party of any condition, or the
breach of any term, provision, warranty, representation, agreement or covenant
contained in this Agreement, whether by conduct or otherwise, in any one or more
instances shall be deemed or construed as a further or continuing waiver of any
such condition or breach or a waiver of any other condition or of the breach of
any other term, provision, warranty, representation, agreement or covenant
herein contained.

    

    22.           Execution.  This
Agreement may be executed by each Party under a separate copy, and in such case
one counterpart of this Agreement shall consist of enough of such copies to
reflect the signatures of all of the Parties.  This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
and it shall not be necessary in making proof of this Agreement or the terms of
this Agreement to produce or account for more than one of such
counterparts.

    
      
         

      

      
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    23.           Authority To Execute
Agreement.  Each person executing this Agreement represents,
warrants and covenants that he/she has the full right and authority to enter
into this Agreement on behalf of the Party on whose behalf such execution is
made, and has the full right and authority to fully bind said Party to the terms
and obligations of this Agreement; and that the Party has not heretofore
assigned, encumbered or in any other manner transferred to any person or entity
all or any portion of the claims released by this Agreement.

    

    24.           Additional
Documents.  Each of the Parties further agrees to execute and
deliver any further documents which may be reasonably required to effectuate
and/or carry out the terms of this Agreement.

    

    25.           Binding
Effect.  The Agreement shall be binding upon and shall inure to
the benefit of the Parties and their respective legal representatives, heirs,
successors and assigns.  Other than as explicitly set forth in this
Agreement, nothing in this Agreement is intended to, or does, create any rights
in third parties.

    

    26.           Enforcement.  In
the event a dispute arises concerning either Party’s performance of its
obligations under this Agreement, the prevailing Party in any action or
proceeding to enforce this Agreement shall be awarded reasonable attorneys’
fees, costs, and expenses incurred in such action or proceeding.

    

    27.           Notices.  Except
as otherwise provided herein, all notices, communications, demands, or
deliveries required by this Agreement shall be given or made in writing, shall
specify the section of this Agreement pursuant to which it is given, shall be
given by hand delivery or recognized overnight courier, and shall be addressed
to the Parties as set forth below.  Such notices shall be deemed to
have been given on the date delivered if delivered by hand delivery or two days
after being deposited with an overnight courier with delivery charge
prepaid.  The addresses and requirements for notice and copies are as
follows:

    
      
         

      

      
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    Notice to
the Larson Parties:

     

    8912 East
Pinnacle Peak Road

    Scottsdale,
Arizona 85255

    Attention:
Christopher D. Larson

    

    with a
copy to:

     

    Briggs
and Morgan, P.A.

    2200 IDS
Center

    80 South
Eighth Street

    Minneapolis,
MN 55402

    Attention:
Dennis L. Knoer

    

    Notice to
the Western Parties:

    

    Western
Capital Resources, Inc.

    11550 I
Street

    Omaha, NE
68137

    Attention:
John Quandahl

    

    with a
copy to:

     

    Maslon,
Edelman, Borman & Brand, LLP

    3300
Wells Fargo Center

    90 South
Seventh Street

    Minneapolis,
MN 55402-4140

    Attention:
Paul D. Chestovich

    

    The above
addresses may be changed at any time by giving five (5) days’ prior written
notice.

    

    28.           Confidentiality.  Each
of the Parties hereto agrees that it will not disclose, disseminate or otherwise
publish in any manner to any third party, whether individual, corporation or
other entity, public or private, the content of the negotiations between Western
and Larson prior to entering into this Agreement or the content of any
informational requests made by, or the subject matter of communications with,
each other in anticipation of entering into this Agreement, specifically
including all communications occurring on and after March 12, 2009 through the
date hereof.

    
      
         

      

      
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    29.           Escrow of Redeemed
Shares.  The certificate and medallion guaranteed stock power
with respect to the Redeemed Shares, contemplated under and delivered pursuant
to Section 5 above, will be delivered to Maslon Edelman Borman & Brand, LLP
as “Escrow Agent” pursuant to the terms and conditions of customary escrow
agreement, under which Larson and Western agree to hold harmless and completely
indemnify the Escrow Agent for any and all costs, expenses and claims relating
to the escrow arrangement contemplated hereunder (other than with respect to
acts of the Escrow Agent taken in bad faith).  The escrow agreement
will provide that the escrow of the Redeemed Shares will
either:  (a) expire upon either (i) the payment of all amounts
owed by Western and Wyoming to Banco Popular, N.A. or (ii) the termination
(including by revocation) of the Guaranty (as defined in the Redemption
Agreement), resulting in either case in the delivery to Western by the Escrow
Agent of the escrowed materials relating to the Redeemed Shares and Western’s
right to fully effectuate the Redemption; or (b) earlier terminate upon (i)
Larson’s performance of the Guaranty through the payment of money to Banco
Popular, N.A. or its designees or assigns, or (ii) the material breach by WERCS
of its obligations under the Indemnification Agreement, resulting in either case
in the delivery to Larson by the Escrow Agent of the escrowed materials relating
to the Redeemed Shares and the cancellation of the Redemption.

     

    [SIGNATURES
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    IN
WITNESS WHEREOF, the Parties, by and through their duly authorized
representatives, have hereunder set their hands and entered into this Agreement
on the day and year first written above.

    

    
      
        	
                Dated:
      April 28, 2009

              	
                /s/ Christopher Larson

              
	 
      	
                CHRISTOPHER
      D. LARSON

              

      

    

    

    STATE OF
___________)

      )
ss

    COUNTY OF
___________)

    

    The
foregoing instrument was acknowledged before me this ____ day of April, 2009, by
Christopher D. Larson.

    

    Subscribed
and sworn to before me

    this ___
day of April, 2009.

    

    
      	
              ___________________________

            
	
              Notary
      Public

            

    

    

    
      
         

      

      
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                    Dated:
      April 28, 2009

                  	NATIONAL
      CASH & CREDIT, LLC
	 
      	 	
                    BY:

                  	
                    /s/ Christopher Larson

                  
	 
      	 	 
      	 
      
	 
      	 	
                    ITS:

                  	
                    Member-Manager

                  

          

        

      

    

    

    STATE OF
___________)

    )
ss

    COUNTY OF
___________)

    

    The
foregoing instrument was acknowledged before me this ___ day of April, 2009, by
Christopher D. Larson, the President of National Cash & Credit, LLC, on
behalf of the company.

    

    Subscribed
and sworn to before me

    this ___
day of April, 2009.

    

    
      
        
          	
                   

                
	
                  Notary
      Public

                

        

      

    

    
      
         

      

      
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                      Dated:
      May 1, 2009

                    	WESTERN
      CAPITAL RESOURCES, INC.
	 
      	 	 
      	 
      
	 
      	 	
                      BY:

                    	
                      /s/ John Quandahl

                    
	 
      	 	 
      	 
      
	 
      	 	
                      ITS:

                    	
                      Chief Executive
  Officer

                    

            

          

        

      

    

    

    STATE OF
______________)

    )
ss

    COUNTY OF
____________)

    

    The
foregoing instrument was acknowledged before me this _____ day of __________,
2009, by ___________________, the _________________ of Western Capital
Resources, Inc., on behalf of the corporation.

    

    Subscribed
and sworn to before me

    this
_________ day of _______, 2009.

    

    
      
        
          	
                   

                
	
                  Notary
      Public

                

        

      

    

     

    
      
         

      

      
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                    Dated:
      May 1, 2009

                  	WERCS,
      INC.
	 
      	 	 
      	 
      
	 
      	 	
                    BY:

                  	
                    /s/ Robert Moberly

                  
	 
      	 	 
      	 
      
	 
      	 	
                    ITS:

                  	
                    Chief Operating
  Officer

                  

          

        

      

    

    

    STATE OF
______________)

    )
ss

    COUNTY OF
____________)

    

    The
foregoing instrument was acknowledged before me this _____ day of __________,
2009, by ___________________, the _________________ of WERCS, Inc., on behalf of
the corporation.

    

    Subscribed
and sworn to before me

    this
_________ day of _______, 2009.

    

    
      
        
          	
                   

                
	
                  Notary
      Public

                

        

      

    

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

     

    
      Execution
Version

       

    

    
      
        
          
            
              
                	
                        Dated:
      May 1, 2009

                      	WYOMING
      FINANCIAL LENDERS, INC.
	 	 	 	 
	 
      	 	
                        BY:

                      	
                        /s/ John Quandahl

                      
	 
      	 	 
      	 
      
	 
      	 	
                        ITS:

                      	
                        Chief Executive
  Officer

                      

              

            

          

        

      

    

    

    STATE OF
______________)

     )
ss

    COUNTY OF
____________)

    

    The
foregoing instrument was acknowledged before me this _____ day of __________,
2009, by ___________________, the _________________ of Wyoming Financial
Lenders, Inc., on behalf of the company.

    

    Subscribed
and sworn to before me

    this
_________ day of _______, 2009.

    

    
      
        
          	
                   

                
	
                  Notary
      Public

                

        

      

    

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    
      Execution
Version

       

    

    
      
        
          	
                  Dated:
      May 1, 2009

                	
                  /s/ John Quandahl

                
	 
      	 
      
	 
      	
                  JOHN
QUANDAHL

                

        

      

    

    

    STATE OF
______________)

     )
ss

    COUNTY OF
____________)

    

    The
foregoing instrument was acknowledged before me this _____ day of __________,
2009, by John Quandahl.

    

    

    Subscribed
and sworn to before me

    this
_________ day of _______, 2009.

    

    
      
        
          	
                   

                
	
                  Notary
      Public

                

        

      

    

     

    
      
         

      

      
        20_______________________

                	 	
                  ____________________

                
	
                  Name
      of Subscriber

                	 	
                  Agreement No.

                

        

      

    

    

    CONFIDENTIAL SUBSCRIPTION AGREEMENT

     

    SKINNY NUTRITIONAL CORP.

    

    Private Sale
of Securities

    

    Consisting
of up to 21,000 Shares of Series A Convertible Preferred Stock

    

    Aggregate
Offering Amount: $2,100,000

    ________________________

    

    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.

    

    SKINNY
NUTRITIONAL CORP.

    3 Bala
Plaza East, Suite 101

    Bala
Cynwyd, Pennsylvania 19004

    Tel.
(610)
784-2000

    

    February
25, 2009

    Amended
as of April 8, 2009

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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 “Becker & Poliakoff, LLP escrow account for Skinny
Nutritional Corp.” in the total amount of the Securities subscribed
for.

    

    

    
      c.      
Wired
funds should be directed as follows:

    

    

    BECKER
& POLIAKOFF, LLP

    ATTORNEY
ESCROW ACCOUNT FOR

    

    SKINNY
NUTRITIONAL CORP.

    ACCOUNT
NO. 1500561919

    

    Signature
Bank

    261
Madison Avenue

    New York,
New York 10016

    ABA No.
026013576

    

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

    

    ALL
DOCUMENTS SHOULD BE RETURNED TO:

    

    Skinny
Nutritional Corp.

    

    c/o
Becker & Poliakoff, LLP

    45
Broadway, 11th
Floor

    New York,
New York 10006

    

    THE
FOLLOWING EXHIBITS ARE ANNEXED TO

    AND
FORM PART OF THIS SUBSCRIPTION AGREEMENT:

    

    
      	
              EXHIBIT A: 

            	
              INVESTOR
      QUESTIONNAIRE

            

    

    

    
      
        	
                EXHIBIT B:

              	
                CERTIFICATE
      OF DESIGNATION, PREFERENCES, RIGHTS AND LIMITATIONS OF THE SERIES A
      CONVERTIBLE PREFERRED STOCK

              

      

    

     

    
      
        
        

      

      
        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
$2,100,000 (the “Purchase Price”). The
Company is offering hereby (the “Offering”) a maximum
of 21,000 shares of its Series A Convertible Preferred Stock (the “Series A Preferred
Shares” or “Series A
Shares”).

    

    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 Series A Preferred Shares 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 Series A Preferred Shares 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 securities being offered consist of a total of up to
21,000 Series A Preferred Shares, par value $.001 per share. The Series A
Preferred Shares are being offered at a purchase price of $100.00 per share (the
“Purchase
Price”) for a minimum subscription amount of $20,000 (200 Series A
Preferred Shares), unless waived by the Company. 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 Series A Preferred Shares may be
purchased, in part or their entirety, by officers and directors of the
Company.

    

    (b)           The
Series A Preferred Shares are being offering 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
April 30, 2009 or (b) the date on which all Series A Preferred Shares 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
Series A Preferred Shares 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.

    

    1.3    
 Selling Agent
Compensation. The Company intends to engage registered broker-dealers to
serve as selling agents (the “Selling Agents”) for
the sale of the Series A Preferred Shares and pay commissions and other
compensation to the Selling Agents who procure purchasers of the Series A
Preferred Shares. We will pay and issue to each Selling Agent a warrant (the
“Agent
Warrants”) to purchase such number of Shares as equals 10% of the total
number of Shares actually sold in the Offering to Subscribers procured by each
Selling Agent. Agent Warrants shall be exercisable at the per share price of
$0.07 for a period of five years from the date of issuance.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    Summary
of Offering and Terms of Preferred Stock

    

    
      	
              Offering Summary:

            	
              The
      Company is offering a maximum of 21,000 Series A Preferred Shares solely
      to accredited investors on a best efforts basis. Each Series A Preferred
      Share has a stated value of $100.00 per share. The Series A Preferred
      Shares and shares of Common Stock issuable upon conversion of the Series A
      Preferred Shares (the “Conversion
      Shares”) are hereafter collectively referred to as the “Securities.”

            

    

     

    
      	
              Minimum
      Subscription:

            	
              The
      minimum subscription amount for the Series A Preferred Shares is $20,000,
      although we may accept subscriptions in lesser amounts at our sole
      discretion.

            

    

     

    
      	
               
      

            	
              Terms
      of Preferred Stock:

            

    

     

    
      	
                              Mandatory
      Conversion:

            	
              Upon
      the effective date (the “Effective
      Date”) of the acceptance by the Secretary of State of the State of
      Nevada of an amendment to the Company’s Articles of Incorporation to
      increase the number of authorized shares of the Company’s Common Stock in
      an amount sufficient to permit the conversion of all of the outstanding
      Series A Preferred Shares into Conversion Shares (the “Amendment”),
      then all of the outstanding Series A Preferred Shares shall, immediately
      upon the occurrence of the aforesaid Effective Date, automatically be
      converted into shares of the Company’s Common Stock (the “Mandatory
      Conversion”).

            

    

     

    
      	
                              Conversion Rate:

            	
              The
      conversion rate of the Series A Preferred Shares initially will be $0.06
      per share, with customary adjustments for stock splits, stock dividends
      and similar events (the “Conversion
      Rate”). Upon conversion of the maximum number of Series A Preferred
      Shares authorized for issuance in this Offering, the Company would issue
      an aggregate of 35,000,000 shares of Common
  Stock.

            

    

     

    
      
        	
                                Voting
      Rights:

              	
                The
      holders of Series A Preferred Shares shall have the right to vote,
      together with holders of Common Stock and not as a separate class, on all
      matters submitted to a vote of the holders of Common Stock on an as
      converted basis. In addition, as long as any Series A Preferred Shares are
      outstanding, the Company shall not, without first obtaining the written
      approval of the holders of at least a majority of the then outstanding
      Series A Preferred Shares: (i) alter, change, modify or amend the terms of
      the Series A Preferred Shares or any other capital stock of the Company so
      as to affect adversely any of the rights of the holders of Series A
      Preferred Shares; (ii) create or provide for the creation of any new class
      or series of capital stock having a preference over or ranking pari passu with the
      Series A Preferred Shares as to payment of dividends, redemption or
      distribution of assets upon a liquidation, dissolution or winding up of
      the Company; (iii) issue any senior or pari passu securities; (iv) agree
      to any provision in any agreement that would impose any restriction on the
      Company’s ability to honor the exercise of any rights of the holders of
      the Series A Preferred Stock or (v) purchase, redeem or otherwise acquire
      for value, or declare, pay or make any provision for any dividend or
      distribution with respect to junior securities or pari passu
      securities.

              

      

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              Dividends:

            	
              The
      Series A Preferred Shares shall not be entitled to dividends unless the
      Company declares dividends in cash or other property to holders of
      outstanding junior or pari passu securities, in which event, each
      outstanding Series A Preferred Share shall be entitled, prior to the
      payment of any dividend on junior or pari passu securities, to receive
      dividends in respect of the number of Conversion Shares issuable to each
      holder of Series A Preferred
Shares.

            

    

     

    However,
in the event that the Effective Date of the Mandatory Conversion does not occur
on or before October 1, 2009 (such date may be referred to as the “Event Date”), holders
of  Series A Preferred Shares will be entitled to receive, when and as
declared by the Board, but only out of funds of the Company legally available
for payment, dividends in cash at an annual rate of 8% per Series A Preferred
Share, payable semi-annually and commencing on November 1, 2009 and thereafter
on May 1 and November 1of each year until such date as the Series A Preferred
Shares are converted into Common Stock or redeemed. All dividends paid with
respect to shares of the Series A Preferred Stock shall be paid pro rata to the Holders
entitled thereto in an amount equivalent in value to the dividend payable in
respect of one share of Common Stock multiplied by the number of Conversion
Shares into which each Series A Preferred Share is convertible based on the
Conversion Rate in effect on the payment date for such dividend.

     

    
      	
               
      

            	
              Liquidation:

            	
              Upon
      the liquidation, dissolution or winding-up of the Company, holders of
      Series A Preferred Shares are entitled to receive a liquidation
      distribution equivalent to the stated value of each Series A Preferred
      Share, plus accumulated and unpaid dividends, if any, before any
      distribution to holders of the Common Stock or any capital stock ranking
      junior to the Series A Preferred
Shares.

            

    

    

    
      	
               
      

            	
              Redemption:

            	
              In
      the event that the Effective Date for the Mandatory Conversion does not
      occur on or prior to the Event Date, the Company shall thereafter have the
      option to redeem some or all of the outstanding shares of Series A
      Preferred Stock at the Redemption Price (the “Redemption”).
      The “Redemption
      Price” shall be equal to the sum of (x) the stated value of the
      Series A Preferred Shares being redeemed plus (y) the
      unpaid dividends, if any, with respect to the Series A Preferred Shares
      being redeemed.

            

    

    

    
      	
               
      

            	
              Rank:

            	
              The
      Series A Preferred Shares will rank senior to the Common Stock and any
      other class or series of the Company’s capital stock either specifically
      ranking by its terms junior to the Series A Preferred Shares or not
      specifically ranking by its terms senior to or on parity with the Series A
      Preferred Shares, with respect to the payment of dividends and upon
      liquidation, dissolution or winding-up of the
  Company.

            

    

    

    
      	
               
      

            	
              Other
      Terms:

            	
              See
      the Form of Certificate of Designation, Preferences and Rights for the
      Series A Convertible Preferred Stock, attached hereto as Exhibit
      B.

            

    

    

    
      	
              Stockholder
      Approval:

            	
              The
      Conversion Shares will only be issued if the Secretary of State of Nevada
      accepts for filing the amendment to the Company’s Articles of
      Incorporation to increase the number of authorized shares of the Company’s
      Common Stock in an amount sufficient to permit the conversion of all of
      the outstanding Series A Preferred Shares into Conversion Shares (the
      “Amendment”).
      The Company’s ability to file the Amendment is subject to the approval of
      its stockholders, of which there can be no guarantee. The Company intends
      to convene a meeting of its stockholders following the closing of the
      Offering for the purpose of, among other things, approving the Amendment.
      If the Company’s stockholders do not approve the Amendment, then the
      holders of Series A Preferred Shares will not be able to convert such
      shares into Conversion Shares and may be required to hold their Series A
      Preferred Shares for an indefinite period of
  time.

            

    

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Piggyback

    
      	
              Registration
      Rights:

            	
              Subscribers
      shall be entitled to the piggyback registration rights applicable to the
      Conversion Shares issuable upon the Mandatory Conversion, as described in
      Section 5.1 of this Agreement.

            

    

    

    
      	
              Subscription Procedure:

            	
              In
      order to subscribe for the Series A Preferred Shares, 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.

            

    

    

    
      	
              
                Restrictions
      on

              

            	
               

            

    

    
      	
              Transferability:

            	
              Neither
      the Series A Preferred Shares offered hereby nor the Conversion Shares
      underlying the Series A Preferred Shares are registered under the
      Securities Act or under the securities laws of the United States or of any
      state or other jurisdiction. As a result, neither the Series A Preferred
      Shares nor the Conversion Shares may 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 Series A Preferred Shares for
      investment purposes only and without a view toward distribution. The
      Series A Preferred Shares are suitable investments only for sophisticated
      investors for whom an investment in the Series A Preferred Shares 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 Series A Preferred
      Shares and who can bear the potential loss of their entire investment. The
      Series A Preferred Shares are being offered and sold only to persons who
      qualify as “accredited investors,” as defined under Regulation D of the
      Securities Act.

            

    

     

    
      1.4      Escrow; No Minimum Offering
Amount. The Subscriber acknowledges and agrees that all subscription
amounts will be deposited in a non-interest bearing account established on
behalf of the Company, but that there is no minimum Offering amount necessary to
conduct a closing for the funds to be released to the Company. Accordingly,
funds may be released to the Company and closings held, from time to time, as
determined by the Company at any time during the Offering Period. During the
Offering period, subscription funds will be placed into the escrow account and
closings will be held from time to time up to the sale of the maximum amount of
Securities described in this Subscription Agreement or the expiration of the
Offering Period. The final Closing shall be either the date of which this
Offering is fully subscribed or the last date during the Offering Period on
which the Company accepts a subscription, whichever is latest. Each closing of
the transactions contemplated hereunder (the “Closing”) shall be
deemed to occur at the offices of Becker & Poliakoff, LLP, 45 Broadway,
11th
Floor, New York, New York 10006, or at such other place as shall be mutually
agreeable to the parties, at 11:00 a.m., New York Time, on such other date as be
mutually agreeable to the parties.

    

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    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;
and

    

    (b)       the
Company shall deliver certificates representing the Series A Preferred Shares
subscribed for to each Subscriber; and

    

    (c)       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. 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)       Restatement of Financial
Statements for the year ended December 31, 2007.  On March 31,
2009, the Company filed with the U.S. Securities and Exchange Commission (the
“SEC”) a
Current Report on Form 8-K (the “Form 8-K”) and
subsequently filed with the SEC on April 1, 2009 an amendment to its Annual
Report on Form 10-KSB for the year ended December 31, 2007 (the “2007 Amendment”). The
Form 8-K and the Amendment were filed in order for the Company to restate its
consolidated financial statements and related financial information for the year
ended December 31, 2007 in order to correct an error in the Company’s accounting
and disclosures for its convertible debentures and options and warrants. The
Amendment (and Form 8-K) restates (i) the Company’s consolidated balance
sheets at December 31, 2007 and December 31, 2006, and (ii) the
Company’s consolidated statements of operations and cash flows for the year
ended December 31, 2007, and the notes related thereto. The significant
effects of the restatement are as follows: (a) to debit debt conversion expense
in an amount of $3,371,964 and to credit additional paid in capital by
$3,371,964 related to the Company’s accounting for the beneficial conversion
feature of convertible debentures that were amended to reduce the conversion
rate; (b) to credit to its profit and loss statement in the amount of $69,525 in
order to properly reflect on its financial statements the stock compensation
expense that the Company incurred in fiscal 2007 in accordance with SFAS 123R;
and (c) reflect a reclassification of the Company’s expense incurred in
connection with its private placement of securities in 2007 to credit “general
and administrative” expense on the Company’s statement of operations by an
amount of $435,749 and debit to additional paid in capital of an equivalent
amount. Due to these adjustments, the Company’s net loss for 2007 was impacted
by $3,371,964 and increased to $5,698,643.

    

    (b)       Annual Report on Form 10-K
for the year ended December 31, 2008. On April 7, 2009, the Company filed
its Annual Report on Form 10-K for the year ended December 31, 2008 (the “2008 Annual Report”)
with the SEC.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (c)       Acknowledgement and
Confirmation. The undersigned hereby agrees and acknowledges that it has
been advised that the Company has filed with the SEC the 2007 Amendment, the
Form 8-K and the 2008 Annual Report (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 and that is 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;

            

    

    

    
      	
               
      

            	
              £

            	
              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;

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              £

            	
              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; or

            

    

    

    
      	
               
      

            	
              £

            	
              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

            

    

    

    
      	
            	
              £

            	
              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.

    

    1.9      Risks
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.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    General
Risks Related to the Company’s Business

    

    The
Company has a history of operating losses. If it continues to incur operating
losses, it eventually may have insufficient working capital to maintain
operations.

    

        
As of December 31, 2008, the Company had 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, 2008 and December
31, 2007, the Company incurred losses from operations of $6,232,123 and
$5,698,643, respectively. 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.

    

    The
Company recently restated its financial statements for the fiscal year ended
December 31, 2007.

    

    In its
Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007 (the
“2007 Form
10-KSB”), the Company reported an accumulated deficit of $13,127,636.
Further, the Company had also reported in its 2007 Form 10-KSB that for the
years ended December 31, 2007 and 2006, it incurred losses from operations
of $2,828,745 and $2,303,446 respectively. Following its reassessment of its
accounting of the beneficial conversion feature of its then outstanding
convertible debentures and its valuation of outstanding stock options and
warrants, the Company filed an amendment to the 2007 Form 10-KSB on April 1,
2009 to restate (i) the Company’s consolidated balance sheets at
December 31, 2007 and December 31, 2006, and (ii) the Company’s
consolidated statements of operations and cash flows for the year ended
December 31, 2007, and the notes related thereto. The significant effects
of the restatement are as follows: (a) to debit debt conversion expense in an
amount of $3,371,964 and to credit additional paid in capital by $3,371,964
related to the Company’s accounting for the beneficial conversion feature of
convertible debentures that were amended to reduce the conversion rate; (b) to
credit to its profit and loss statement in the amount of $69,525 in order to
properly reflect on its financial statements the stock compensation expense that
the Company incurred in fiscal 2007 in accordance with SFAS 123R; and (c)
reflect a reclassification of the Company’s expense incurred in connection with
its private placement of securities in 2007 to credit “general and
administrative” expense on the Company’s statement of operations by an amount of
$435,749 and debit to additional paid in capital of an equivalent amount. Due to
these adjustments, the Company’s net loss for 2007 was impacted by $3,371,964
and increased to $5,698,643.

    

    The
Company has been reliant 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 our securities to fund our operations. During the 2008 fiscal year, the
Company raised approximately $5,000,000 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. Our independent
auditors have included a “going concern” explanatory paragraph in their report
to our financial statements for the year ended 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.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    If the
Company is unable to achieve sufficient levels of sales, it will need
substantial additional debt or equity financing in the future for which it
currently has no commitments or arrangement. 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.  

    

    Risks
Related to this Offering

    

    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 Series A Preferred
Shares or the Conversion Shares are registered or, in the opinion of counsel
acceptable to us, registration is not required under the Securities Act or any
applicable state securities laws.

    

    Purchasers
of our Series A Preferred Shares 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. No trading market exists for the Series A Preferred
Shares and neither the Series A Preferred Shares nor the Conversion Shares have
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 there can be no assurance that any registration statement the Company may
file covering such securities will be 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 Series A Preferred Shares.

    

    There is
no public market for the Company’s Series A Preferred Stock 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 Series A Preferred Stock for an indefinite period of
time.  Accordingly, prospective investors must have adequate means of
providing for their current needs and personal contingencies. Investors should
be aware of the high risks involved in an investment in the
Company.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    The
conversion of the Series A Preferred Shares into Conversion Shares is subject to
the approval of the Company’s stockholders and there can be no guarantee the
stockholder approval will be obtained.

    

    Pursuant
to the terms of this Agreement, the Company is offering its Series A Preferred
Shares, for which there is no trading market. The Conversion Shares which the
Company may issue upon the conversion of the Series A Preferred Shares, will
only be issued upon the occurrence of the mandatory conversion event as
described in the Certificate of Designations, Rights and Limitations of the
Series A Convertible Preferred Stock, which has been annexed as Exhibit B to this
Agreement (the “Certificate of
Designations”). As described in the Certificate of Designations, the
Company will issue the Conversion Shares upon the date that the Secretary of
State of Nevada accepts for filing an amendment to the Company’s Articles of
Incorporation to increase the number of authorized shares of the Company’s
Common Stock in an amount sufficient to permit the conversion of all of the
outstanding Series A Preferred Shares into Conversion Shares (the “Amendment”). The
Company’s ability to file the Amendment is subject to the approval of the
Company’s stockholders, of which there can be no guarantee. If the Company’s
stockholders do not approve the Amendment, then the holders of Series A
Preferred Shares will not be able to convert such shares into Conversion Shares
and may be required to hold their Series A Preferred Shares for an indefinite
period of time. Although the Company may ultimately agree to redeem Series A
Preferred Shares if it is unable to obtain shareholder approval of the
Amendment, there can be no guarantee that the Company would have sufficient
resources to do so. Accordingly, a Subscriber must be able to bear the risk of a
complete loss of its investment.

    

    The
possible redemption of the Series A Preferred Shares may deprive Subscribers of
receiving all the anticipated benefits from purchasing Series A Preferred
Shares.

     

    In the
event the Company’s stockholders do not approve the Amendment, the Company will
have the option of redeeming the Series A Preferred Shares, although the
Purchasers will not have the right to require the redemption of the Series A
Preferred Shares. The redemption price for the Series A Preferred Shares is
equal to the sum of the stated value of the Series A Preferred Shares being
redeemed plus the unpaid dividends, if any, with respect to the Series A
Preferred Shares being redeemed. Accordingly, if the Company does not obtain
stockholder approval for the Amendment and the Series A Preferred Shares are
redeemed, Subscribers will not have received any benefit from their investment.
Further, during the period from the date of the notice of redemption and up to
the redemption date, holders will not be entitled to convert the Series A
Preferred Shares. Further, if the Company does not have the available capital to
redeem the Series A Preferred Shares if the Amendment is not approved,
Subscribers may be required to hold the Series A Preferred Shares for an
indefinite period of time. Accordingly, a Subscriber must be able to bear the
risk of a complete loss of its investment.

    

    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.

    

    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.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

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

    

    Our
shares of Common Stock 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 Stock will develop in the future. In the
absence of an active trading market investors may have difficulty buying and
selling our Common Stock or obtaining market quotations; market visibility for
our Common Stock may be limited; and a lack of visibility for our Common Stock
may have a depressive effect on the market price for our Common
Stock.

    

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

    

    Our
Common Stock is 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 Stock 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 Stock and purchasers of our Common
Stock to sell their shares of our Common Stock.

    

    Additionally,
our Common Stock is 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 Stock. 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 Stock.

    

    Preferred
Stock as an anti-takeover device.

    

    The
Company is authorized to issue 1,000,000 shares of preferred stock, $.001 par
value.  The Series A Preferred Shares offered hereby are the first
series of the Company’s Preferred Stock to be issued.  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.

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    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.

     

    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)      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”).

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    
       

      (B)      The
Company is currently authorized to issue 250,000,000 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 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.

      

      (C)      The
Company has the requisite corporate power and authority to enter into, deliver
and consummate the transactions contemplated by this Agreement, and subject to
the filing of the Amendment, to issue and sell the Securities and deliver the
Series A Preferred Shares, and otherwise to carry out its obligations hereunder.
The execution and delivery of this Agreement 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 other than
as described above in connection with the need to obtain stockholder approval of
the Amendment. When executed and delivered by the Company, this Agreement will
constitute the legal, valid and binding obligation of the Company, enforceable
as to the Company in accordance with its 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)      The
Company is not required to obtain any consent, waiver, authorization 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) in connection with the approval of the Amendment; (ii) any filings required
by state securities laws, (iii) the filing of a Notice of a Sale of Securities
on Form D with the Commission under Regulation D of the Securities Act, (iv)
those that have been made or obtained prior to or contemporaneously with the
date of this Agreement and (v) filings pursuant to the Exchange
Act.

      

      (E)       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)       The
Series A Preferred Shares 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 Conversion Shares have been duly authorized and, when issued and paid
for in accordance with this Agreement and the Certificate of Designations, 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.

    

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (G)      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
have a material adverse effect on the Company.

     

    (H)      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.

    

    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.

      

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      (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.

      

      (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.

    

    
      (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)).

    

    
      

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    

    
       

      (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.

    

    

    (J)       The
Purchaser acknowledges and agrees that there is no “minimum” offering amount for
the Securities. The Purchaser acknowledges and agrees that funds may be
immediately released to the Company.

    

                (K)      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 legends (or 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.

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

       

    

    (L)       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.  Prospective Purchasers should consult with
their own legal, tax and financial advisors with respect to the Offering made
pursuant to this Agreement.

    

    (M)     __________
(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.

    

    (N)      The
undersigned hereby acknowledges that officers, affiliates, employees and
directors of the Company and/or the Selling Agents may purchase Securities in
the Offering.

    

    
      (O)      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.

    

    

    (P)       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 indemnified
party shall promptly notify 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, a “Claim”), the
indemnifying party will have the right at its expense to assume the defense
thereof using counsel reasonably acceptable to the indemnified party. The
indemnified party shall have the right to participate, at its own expense, with
respect to any such third party Claim. In connection with any such third party
Claim, Purchasers and the Company shall cooperate with each other and provide
each other with access to relevant books and records in their possession. No
such third party Claim shall be settled without the prior written consent of the
indemnified party, which shall not be unreasonably withheld. If a firm written
offer is made to settle any such third party Claim and the indemnifying party
proposes to accept such settlement and the indemnified party refuses to consent
to such settlement, then: (i) the indemnifying party shall be excused from, and
the indemnified party shall be solely responsible for, all further defense of
such third party Claim; and (ii) the maximum liability of the indemnifying party
relating to such third party Claim shall be the amount of the proposed
settlement if the amount thereafter recovered from the indemnified party on such
third party Claim is greater than the amount of the proposed
settlement.

    

    ARTICLE
V

    ADDITIONAL AGREEMENTS BY THE
PARTIES

    

    Section
5.1       Registration Rights

    

    The
Subscriber and the Company agree that the Subscriber 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 Conversion Share issuable upon conversion of the Series A
Preferred Shares issued under this Agreement; and (ii) 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 effectively registered under the Securities Act and disposed of
pursuant thereto; (B) registration under the Securities Act is no longer
required for subsequent public distribution of such security; 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. For the purpose
of the foregoing, inclusion of the Registrable Shares by the Holder in a
Registration Statement pursuant to this Section 5.1 under a condition that the
offer and/or sale of such Registrable Shares not commence until a date not to
exceed 90 days from the effective date of such registration statement shall be
deemed to be in compliance with this Section 5.1. Further, the Company shall not
be required to register for resale any Registrable Securities if at the time of
such proposed registration, the Registrable Securities may be sold without any
limitation under Rule 144. 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:

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (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 its best 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 registration statement
filed by the Company hereunder shall remain effective for the earlier of (i) 9
months or (ii) 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.

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (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.

    

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

    

    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.

    

    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.

    
      

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

    

    
       

      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.  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.

    

    
      

    

    
      6.10    Non-Assignment.  This
Agreement is not transferable or assignable by the Purchaser except as may be
provided herein.

    

    
      

    

    
      6.11    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.

    

    

    6.12    Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the Company, the Purchasers and their respective successors and
permitted assigns.

    

    Signature
pages to Subscription Agreement Follows

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    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 ____________, 2009.

     

    
      
        
          
            
              	
                      THE COMPANY:

                    
	  
	
                      SKINNY NUTRITIONAL CORP.:

                    
	
                       

                    
	
                      Ronald Wilson,

                    
	
                      Chief Executive Officer

                    

            

          

        

      

    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    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:
__________________ ___, 2009

    

    Subscription
Amount:  $_____________

    

    Number of
Shares of Series A Preferred Stock to be purchased: _______________

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  _____________________________________________

                                
	
                                  (Name
      of Investor - Please Print)

                                
	 
	
                                  _____________________________________________

                                
	
                                  (Signature)

                                
	 
      
	
                                  _____________________________________________

                                
	
                                  (Name
      of co-Investor - Please Print)

                                
	 
      
	
                                  _____________________________________________

                                
	
                                  (Signature
      of
Co-Investor)

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    	
                            Exact name Shares are to be
      issued under:

                          	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	
                            Address
      for Delivery of Certificates

                          	 	 
      
	
                            (if
      not the same as in Questionnaire):

                          	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    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:
__________________ _____2009

    

    Subscription
Amount:  $_____________

    

    Number of
Shares of Series A Preferred Stock to be purchased: _______________

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	 
      
	
                                    Name of Partnership

                                  
	
                                    (Please Type or Print)

                                  
	 
	
                                    By:

                                  	  
	
                                    (Signature)

                                  
	 
	
                                    Name:

                                  	  
	
                                    (Please Type or Print)

                                  
	 
	
                                    Title:

                                  	  
	
                                    (Please Type or Print)

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      	
                              Exact name Shares are to
      be issued under:

                            	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	
                              Address
      for Delivery of Certificates

                            	 	 
      
	
                              (if
      not the same as in Questionnaire):

                            	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      

                    

                  

                

              

            

          

        

      

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    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:
__________________ _____2009

    

    Subscription
Amount:  $_____________

    

    Number of
Shares of Series A Preferred Stock 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 Shares are to be
      issued under:

                            	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	
                              Address
      for Delivery of Certificates

                            	 	 
      
	
                              (if
      not the same as in Questionnaire):

                            	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    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:
__________________ _____2009

    

    Subscription
Amount:  $_____________

    

    Number of
Shares of Series A Preferred Stock 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
      Shares are to be issued under:

                                          	 	  
	  	 	  
	  	 	  
	
                                            Address for Delivery of Certificates

                                          	 	  
	
                                            (if not the same as in Questionnaire):

                                          	 	  
	  	 	  
	 
      	 	 
      
	 
      	 	 
      

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        27

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00158-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00158-of-00352.parquet"}]]