Document:

Exhibit
      10.6

                      

              

            

          

        

         

        DISTRIBUTION
AGREEMENT

      

    

     

    THIS
DISTRIBUTION AGREEMENT (“Agreement”) is effective as of the 15th day of
July, 2009, by and between Skinny Nutritional Corporation, a Nevada corporation
(“Supplier”), and Canada Dry Bottling Company of New York, a New York limited
partnership (“Distributor”).

     

    WHEREAS, Supplier is the owner
or exclusive U.S. licensee, with authority to sublicense, of the trademarks
listed on Exhibit A hereto, and all service marks, designs, logos, trade names,
advertising, commercial symbols and slogans used in connection with Products (as
defined below) (collectively or separately, the “Trademarks”) for non-alcoholic
beverages; and

     

    WHEREAS, Supplier is engaged
in the business of, among other things, manufacturing, selling and distributing
beverages bearing one or more of the Trademarks (“Products”) in various product
forms as set forth on Exhibit B hereto  and such other forms as the
parties may agree in writing from time to time; and

     

    WHEREAS, Distributor is
engaged in the business of manufacturing, selling and distributing beverages;
and

     

    WHEREAS, Supplier and
Distributor hereby propose that Supplier license the Trademarks to Distributor
and sell the Products to Distributor for sale and distribution in the territory
specified below; and

     

    NOW, THEREFORE, in
consideration of these premises and the mutual covenants contained herein,
Supplier and Distributor agree as follows:

     

    
      
        	
                 
      1.

              	
                Appointment.

              

      

    

     

    
      	
               
      

            	
              a.

            	
              Subject
      to the express provisions of this Agreement, Supplier hereby grants to
      Distributor the exclusive right to sell and distribute Products within the
      Territory, as defined below.

            

    

     

    
      	
               
      

            	
              b.

            	
              Supplier
      shall offer to Distributor the exclusive right to sell and distribute in
      the Territory pursuant to the terms and conditions of this Agreement, all
      new or additional beverages manufactured, distributed, owned or licensed
      by Supplier that Supplier wishes to introduce in the Territory. If
      Distributor accepts such offer, then such new or additional products shall
      be added as Products under this Agreement and shall be subject to the
      terms hereof. In the event Distributor declines such offer or fails to
      respond to such offer within [***] days thereof,
  then:

            

    

     

    
      	
               
      

            	
              (i)

            	
              if
      the new or additional product is in a [***] different from
      the  [***] of any Product previously distributed by Distributor
      and with a [***] that is distinct from and not confusingly similar to
      the  [***]of any Product previously distributed by Distributor,
      Supplier shall have the right to sell or distribute such new or additional
      products in the Territory directly or through third parties;
      and

            

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (ii)

            	
              if
      the new or additional product is a new or additional [***] of an existing
      category of Product previously distributed by Distributor, then Supplier
      shall [***] such new or additional products in the Territory directly or
      through third parties.

            

    

     

    For
purposes of this Agreement, the term “[***]” shall mean a product or line of
products [***], such as, without limitation, the initial [***] (including within
such [***] and other [***] including but not limited to [***].

     

    
      
        	
                 
      2.

              	
                Supplier’s
      Obligations.

              

      

    

     

    
      	
               
      

            	
              a.

            	
              Supplier
      hereby licenses the Trademarks and other Intellectual Property (as defined
      in Paragraph 2.f.ii) to Distributor for use on and in connection with the
      advertising, promotion, sale and distribution of the
      Products.  Supplier shall have the right to use Distributor's
      name and logo on Supplier’s website for the purpose of identifying
      Distributor as a distributor.

            

    

     

    

    
      	
               
      

            	
              b.

            	
              Supplier
      shall fill promptly all orders from Distributor for Products and for other
      items to be provided by Supplier hereunder. Supplier’s prices and terms of
      sale to Distributor for the Products shall be [***]. Supplier’s prices to
      Distributor (net of all discounts, allowances, rebates and promotional
      support payments provided to Distributor by Supplier) shall reflect [***]
      to any permitted [***] in the Territory (net of all discounts, allowances,
      rebates and promotional support payments provided to such customer by
      Supplier), to reflect the [***] Distributor. Supplier shall not [***] for
      any item on less than [***]  days’ advance written
      notice.  The initial price for the Products shall be [***] per
      12 pack case.

            

    

     

    
      	
               
      

            	
              c.

            	
              Supplier
      shall set aside an exclusive area described in the schedule attached
      hereto as Exhibit “C” (the “Territory”) in which no person other than
      Distributor will distribute, sell or promote Products. Supplier shall not
      suffer or permit in the Territory any other distributor or licensee of the
      Trademarks with respect to Products and shall not itself sell, nor suffer
      or permit any others to sell, Products for resale or use in the Territory,
      nor shall Supplier sell any Products to any person that Supplier knows or
      has reason to know is likely directly or indirectly to resell the Products
      in the Territory. Supplier is developing a transshipment policy in
      consultation with Distributor for the purpose of discouraging
      transshipment into the Territory and redressing the economic impact of
      transshipping on the affected distributors. The parties will negotiate in
      good faith to finalize such a policy within ninety (90) days of execution
      of this Agreement.

            

    

     

    Notwithstanding
the foregoing:

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        2

        
          

        

      

      
         

      

    

    (i)           Supplier
may continue to sell Products directly to outlets in the Territory of any
account that will not accept a DSD System for any beverages; provided that the
Supplier shall use reasonable efforts to persuade such account to purchase the
Products on a DSD basis from Distributor;

     

    (ii)           To
the extent that any account with multiple outlets in the Territory does not
[***]of any beverages to its outlets and purchases beverages only through a
[***] that services only outlets of such customer (an “Alternately Serviced
Account”), and if such [***] purchases all beverages [***]thereof and not from
any [***] of such beverages, then the Supplier may sell Products for such
customer [***], provided that Supplier ensures that no such Products sold
through [***] are resold to any other customer with outlets in the Territory;
and

     

    (iii)           Supplier
may continue to sell Products directly to the [***] for resale at [***] in the
Territory and directly to [***], provided that after [***], Supplier’s prices to
Distributor shall reflect the [***] provided for in Section 2.b.
above.

     

    If
Supplier sells Products pursuant to clauses (i), (ii) and/or (iii) above,
Supplier shall pay Distributor quarterly an “Invasion Fee” for each case of
Product sold by Supplier during the previous quarterly period for resale in the
Territory equal to [***] for such Product.  Each such payment shall be
accompanied by a detailed accounting showing the calculations of the amount due,
including [***].

     

    Supplier
shall not make sales pursuant to clauses (i), (ii) ) and/or (iii) above without
first ensuring that the customer will provide Supplier with all information
necessary to calculate the Invasion Fee, including the number of cases of each
Product SKU purchased by such customer in each quarter for resale in each outlet
of such customer within the Territory.  For sales of Products to
[***], to the extent that Supplier is unable to obtain from [***]  the
number of cases of each Product sold to [***] for resale in the Territory, the
number of cases of Products sold by Supplier to [***] for resale in the
Territory during any period shall be determined by multiplying the total number
of cases of the Product sold by Supplier directly to [***], as the case may be,
during the period concerned, by a fraction, the numerator of which shall be the
[***] in the Territory and the denominator of which shall be the [***] within
the [***] or within the [***], as the case may be.

    

    
      	
               
      

            	
              d.

            	
              Supplier
      shall create and make available to Distributor advertising and promotion
      materials for Products of a form, in amounts and upon terms reasonably
      established by Supplier.

            

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        3

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              e.

            	
              Supplier
      shall promptly pay or credit to Distributor’s account, when due, not less
      frequently than monthly, all credits, discounts, allowances, incentive
      payments, bill backs or other reimbursements due Distributor pursuant to
      any program to which the parties may agree.  Supplier and
      Distributor will meet and agree (i) on an annual basis on a projected
      [***] and (ii) on a quarterly basis on a projected [***], and will [***]
      accordingly.  In the event that Supplier and Distributor cannot
      agree on the projected average [***] for any year, the amount applicable
      to the prior year shall be used for such year. . In the event that
      Supplier and Distributor cannot agree on the projected [***] for any
      quarter, the amount applicable to the then current year shall be used for
      such quarter. Each quarter, authorized representatives of both parties
      will meet to determine final reconciliation of the agreed upon
      [***].

            

    

     

    
      	
               
      

            	
              f.

            	
              Supplier
      represents and warrants that:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Products (A) shall be pure and wholesome, fit for human consumption,
      merchantable and free from all defects, (B) shall, in all instances,
      comply with all applicable Federal, state or local laws and regulations,
      in all respects, including without limitation, beverage quality, labeling,
      identity, quantity, packaging, and returnable container or deposit
      requirements; (C) shall not be adulterated and misbranded within the
      meaning of those terms under the Federal Food, Drug and Cosmetic Act, as
      amended, and shall not be an article or articles which  may not,
      under the provisions, of said Act, be introduced into interstate commerce;
      (D) shall not be adulterated or misbranded within the meaning of the
      Federal Insecticide, Fungicide, and Rodenticide Act, the Federal Hazardous
      Substances Act, or any applicable state pure foods act or any other
      applicable Federal, state, or local law or regulation; and (E) when
      delivered to Distributor, shall have a remaining shelf life of not less
      than five (5) months, the expiration of which shall be clearly marked on
      the outside of all cartons and
pallets.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              it
      is the owner or exclusive U.S. licensee of the Trademarks and all other
      intellectual property used in the packaging, labels, marketing and
      promotional materials designed or prepared by Supplier for the Products
      (collectively, including the Trademarks, the “Intellectual Property”),
      that it has the right to license the Intellectual Property to Distributor
      throughout the term of this Agreement, and that Distributor’s use of the
      Intellectual Property will not infringe or violate the rights of any third
      party; and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              it
      is free to enter into this Agreement and is not under any obligation,
      written or otherwise, to any other party which would prevent Supplier from
      complying with all the terms and conditions of this
    Agreement.

            

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              g.

            	
              Supplier
      shall replace all Products that, at the time and place of delivery, do not
      meet the requirements of Section 2.f.(i) above, at Supplier’s expense,
      including [***] shall be allowed in the
      amount of Distributor’s laid-in cost, at Distributor’s
      option.  Supplier shall also [***] for all of Distributor’s
      [***] as a consequence of such Products [***] above (including but not
      limited to Products in the hands of Distributor or of the retail trade
      that have [***] if such Products did not conform to the requirements of
      [***]) or as a consequence of any other fault of Supplier, and the [***],
      at Supplier’s option. The foregoing shall not be construed to entitle
      Distributor to recover lost profits or other consequential damages
      resulting from the failure of Products to conform to the requirements of
      Section 2.f.(i) other than as expressly set forth
  above.

            

    

     

    
      	
               
      

            	
              h.

            	
              Supplier
      shall materially comply with all laws, rules, regulations, requirements,
      orders and ordinances now in effect or which may hereafter be enacted or
      promulgated applicable to its operations or obligations under this
      Agreement.

            

    

     

    
      
        	
                 
      3.

              	
                Distributor’s
      Obligations.

              

      

    

     

    
      	
               
      

            	
              a.

            	
              Distributor
      shall pay Supplier for Product and any other items sold by Supplier to
      Distributor in accordance with the prices and terms of sale set forth in
      this Agreement or otherwise agreed to in writing by Supplier and
      Distributor.  All payments shall be due within [***] days of
      delivery of such Products and items to
  Distributor.

            

    

     

    
      	
               
      

            	
              b.

            	
              Distributor
      shall materially comply with all laws, rules, regulations, requirements,
      orders and ordinances now in effect or which may hereafter be enacted or
      promulgated applicable to its operations or obligations under this
      Agreement.

            

    

     

    
      	
               
      

            	
              c.

            	
              Distributor
      shall use reasonable efforts to promote the sale of Product in the
      Territory and to maintain a business organization and equipment necessary
      to function properly in the manufacture, sale and distribution of Product.
      Distributor may engage such subdistributors, agents or other third parties
      to assist it in the performance of this Agreement as Distributor deems
      appropriate.

            

    

     

    
      	
               
      

            	
              d.

            	
              Distributor
      shall not sell or distribute Product outside the Territory or sell the
      Product to any person that Distributor knows or has reason to believe is
      likely to resell the Products outside the Territory. Supplier shall
      include in all distribution agreements entered into hereafter, and use
      diligent efforts to add to all existing distribution agreements, a
      provision [***]. in all its bottling and distribution agreements with all
      [***].

            

    

     

    
      	
               
      

            	
              e.

            	
              Distributor
      and Supplier shall jointly prepare and execute a reasonable Annual
      Marketing Plan for the Products for each marketing year, including
      participation in such marketing programs as the parties shall
      agree.  For the first year of the term hereof, the Annual
      Marketing Plan is as set forth on Exhibit “D.”  If Distributor
      and Supplier are unable to agree on an Annual Marketing Plan for any
      subsequent year, [***]shall govern until agreement is
    reached.

            

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        5

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              f.

            	
              Supplier
      shall cover [***]% of any and all slotting fees, subject to Supplier’s
      approval.  Supplier agrees to commit not less than $[***]in
      slotting fees in the Territory during [***].  Supplier agrees to
      [***] to ensure payment of [***] to [***] by Supplier to a chain
      customer.  Supplier and Distributor shall agree upon Supplier’s
      commitment for slotting fees for each subsequent seven-year renewal
      term.

            

    

     

    
      	
               
      

            	
              g.

            	
              Distributor
      shall maintain and submit to Supplier at reasonable intervals sales,
      marketing and similar reports relating to Product in a mutually agreed
      form; provided that Distributor shall not be required to provide [***]
      information.  Distributor shall maintain and submit to Supplier
      reports on [***], aggregated by [***] but without [***] data, on a [***]
      basis.

            

    

     

    
      	
               
      

            	
              h.

            	
              Except
      as otherwise provided in this Agreement, Distributor shall not sell,
      transfer, convey, assign, or otherwise dispose of all or any part of its
      interest in this Agreement without the prior written consent of Supplier,
      provided that
      such consent is not unreasonably withheld; and provided further that
      no consent shall be required for any transfer so long as the majority of
      the outstanding voting shares or other form of voting ownership of the
      entity holding Distributor’s rights and obligations under this Agreement
      is held by:  [***] (“Family Members”); or any trusts for the
      benefit of any Family Members of any of them; or any corporation or other
      business entity controlled by [***], Family Members or such trusts. It
      shall be presumptively unreasonable for Supplier to withhold its consent
      to any transfer of Distributor’s rights under this Agreement to any
      transferee that has, or the senior management of which has, at least [***]
      in the beverage industry and [***] of at least [***] during the
      [***]period immediately preceding the month in which Distributor notifies
      Supplier of the identity of the proposed
  transferee.

            

    

     

    
      	
               
      

            	
              i.

            	
              Distributor
      warrants and represents to Supplier that it is free to enter into this
      Agreement and is not under any obligation, written or otherwise, to any
      other party which would prevent Distributor from complying with all the
      terms and conditions of this
Agreement.

            

    

     

    
      
        	
                 
      4.

              	
                Trademarks.

              

      

    

     

    
      	
               
      

            	
              a.

            	
              Distributor
      shall notify Supplier promptly upon discovery of any use of any mark,
      trade name or trademark similar to any of the
      Trademarks.  Supplier shall not be required to take any action
      with respect to any infringement, but Distributor shall join with
      Supplier, when requested by Supplier, in any proceeding or litigation or
      other action for the protection of the Trademarks and the goodwill
      associated therewith.  All costs and expenses of such litigation
      or action shall be borne by
Supplier.

            

    

     

    
      	
               
      

            	
              b.

            	
              If
      Supplier does not take legal action against an infringement, Distributor
      may do so in its own name and/or that of Supplier, provided that
      Distributor bears all costs and expenses of such action.  In
      that event, Distributor shall be entitled to any and all proceeds of such
      action.

            

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              c.

            	
              Nothing
      contained in this Agreement shall be construed to vest in Distributor any
      right, title or interest in or to any of the Trademarks other than the
      rights and license expressly granted
herein.

            

    

     

    
      
        	
                 
      5.

              	
                Indemnification
      and Insurance.

              

      

    

     

    
      	
               
      

            	
              a.

            	
              Distributor
      shall indemnify and save harmless Supplier from and against all losses,
      claims, damages or other costs of any nature or kind whatsoever arising
      directly or indirectly out of or relating to any allegation
      of:  (i) the breach of any warranty, representation or agreement
      made by Distributor in this Agreement; (ii) the negligence or intentional
      misconduct, misfeasance or nonfeasance of Distributor, its officers,
      employees, agents, servants or contractors; (iii) any quality or condition
      of or inherent defect introduced into the Products as a consequence of the
      improper storage, handling, warehousing, distribution or sale by
      Distributor of Products; (iv) any wrongful, false or misleading claim,
      advertising or representation by Distributor or by any agent or
      representative of Distributor regarding the Products that are not endorsed
      by Supplier; or (v) the conduct of Distributor’s business (including the
      use of promotional materials and packaging not designed, manufactured or
      approved by the Supplier). Such indemnity shall include, but not be
      limited to, reasonable expenses, attorneys’ fees, court costs and other
      expenses of investigation, litigation and settlement of any such claim.
      Supplier shall provide Distributor prompt written notice of receipt of any
      such claim and shall not settle any such claim without the prior knowledge
      and written consent of Distributor, which consent shall not be
      unreasonably withheld.  Notwithstanding the foregoing, upon
      written notice to Supplier that Distributor has assumed the defense of any
      legal action or proceeding, Distributor shall not be liable to Supplier
      for any legal or other expenses subsequently incurred by Supplier in
      connection with the defense thereof, except in the event of a conflict of
      interest or other matter that prevents counsel for Distributor from fully
      and zealously representing the interests of both Supplier and
      Distributor.

            

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        7

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              b.

            	
              Supplier
      shall indemnify and save harmless Distributor from and against all losses,
      claims, damages or other costs of any nature or kind whatsoever arising
      directly or indirectly out of or relating to any allegation of: (i) the
      breach of any warranty, representation or agreement made by Supplier in
      this Agreement; (ii) Distributor’s use of the Intellectual Property in the
      Territory in accordance with the terms of this Agreement; (iii) the
      negligence or intentional misconduct, misfeasance or nonfeasance of
      Supplier, its officers, employees, agents, servants or contractors; (iv)
      any quality or condition of or inherent defect in the Products supplied by
      Supplier, including but not limited to any imperfection, contamination or
      substandard quality, production, packaging, processing, storage, handling
      or transportation or other condition relating to the Products at or before
      the time they were received by Distributor; (v) any wrongful, false or
      misleading claim, advertising or representation by Supplier or by any
      agent or representative of Supplier regarding the Products (other than one
      subject to indemnification by Distributor pursuant to Section 5.a.(iv)
      above); (vi) any third party that such person or entity has any right,
      claim or color of right granted or allowed by Supplier to purchase, sell,
      market or distribute Products in the Territory; or (vii) the conduct of
      Supplier’s business (including the promotional materials and packaging
      designed, manufactured or approved by the Supplier).  Such
      indemnity shall include, but not be limited to, reasonable expenses,
      attorneys’ fees, court costs and other expenses of investigation,
      litigation and settlement of any such claim. Distributor shall provide
      Supplier prompt written notice of receipt of any such claim and shall not
      settle any such claim without the prior knowledge and written consent of
      Supplier, which consent shall not be unreasonably
      withheld.  Notwithstanding the foregoing, upon written notice to
      Distributor that Supplier has assumed the defense of any legal action or
      proceeding, Supplier shall not be liable to Distributor for any legal or
      other expenses subsequently incurred by Distributor in connection with the
      defense thereof, except in the event of a conflict of interest or other
      matter that prevents counsel for Supplier from fully and zealously
      representing the interests of both Supplier and
    Distributor.

            

    

     

    
      	
               
      

            	
              c.

            	
              Notwithstanding
      the foregoing, to the extent that any claim that would otherwise be
      subject to indemnification pursuant to Paragraph 5.a. is traceable in
      whole or in part to

            

    

     

    
      	
               
      

            	
              i.

            	
              any
      ingredient supplied by Supplier;

            

    

     

    
      	
               
      

            	
              ii.

            	
              any
      act or failure required or approved by Supplier;
  and/or

            

    

     

    
      	
               
      

            	
              iii.

            	
              any
      matter subject to indemnification by Supplier under Paragraph
      5.b.;

            

    

     

    then
Supplier shall pay the percentage of all costs, fees, damages, judgments and
decrees allocable to such ingredient, act, failure or matter, and Distributor
shall pay only for the percentage of the costs, fees, damages, judgments and/or
decrees allocable to Distributor’s own acts or failure to act.

     

    
      	
               
      

            	
              d.

            	
              During
      the term of this Agreement, each party shall secure, pay for and maintain
      in full force and effect comprehensive general liability insurance
      (including contractual liability and with product liability coverage
      respecting the Products) in an amount of not less than [***] in the
      aggregate and [***]per occurrence.  Such insurance maintained by
      each party shall name the other party as additional
      insured.  Each party shall furnish to the other annually a
      certificate confirming such
coverage.

            

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      
        	
                 
      6.

              	
                Termination.

              

      

    

     

    
      	
               
      

            	
              a.

            	
              Supplier
      may terminate this Agreement if Distributor does not correct, as provided
      in this Paragraph 6.b., any material failure, other than a failure
      resulting from events of Force Majeure (as defined in Paragraph 9), to
      fulfill any of its obligations hereunder after receiving written notice
      from Supplier identifying the alleged failure with specificity and stating
      that Supplier intends to terminate this Agreement if such failure is not
      timely corrected.  Distributor shall have [***] days after
      receipt of such notice to effect a cure of any default, provided, however,
      that if any such default cannot reasonably be cured within
      [***]  days, Distributor shall be deemed to have timely cured
      the default if it commences to cure the default within such [***] day
      period and diligently proceeds thereafter to complete the cure within the
      period in which such cure can reasonably be completed; and provided
      further that if a default is of a nature that cannot reasonably be cured,
      Distributor shall be deemed to have cured such default if it [***] of the
      same type of default.  Upon a failure by Distributor to cure a
      material default as provided in the preceding sentence, Supplier may
      terminate this Agreement by not less than [***]  days’ written
      notice given within [***] days after expiration of the period for
      cure.

            

    

     

    
      	
               
      

            	
              b.

            	
              In
      addition to any other grounds for termination set forth herein, this
      Agreement may also be terminated by Supplier in the event
    of:

            

    

     

    
      	
               
      

            	
              i.

            	
              The
      discontinuance of service by Distributor to active customers for the
      Products for a period of more than thirty days, excluding delays caused
      directly or indirectly by Force Majeure (as defined in Paragraph 9 below);
      or

            

    

     

    
      	
               
      

            	
              ii.

            	
              Any
      insolvency of Distributor or any assignment by Distributor for the benefit
      of creditors; or the filing of a voluntary bankruptcy or reorganization
      petition by Distributor or the failure of Distributor to vacate an
      involuntary bankruptcy or reorganization petition filed against
      Distributor within sixty (60) days after the date of such filing, or the
      failure of Distributor to vacate the appointment of a receiver or trustee
      for the Distributor or any interest in the Distributor’s business within
      sixty (60) days after such
appointment.

            

    

     

    
      	
               
      

            	
              c.

            	
              Distributor
      may terminate this Agreement at any time by giving Supplier at least [***]
      days prior written notice.

            

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        9

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              d.

            	
              Upon
      termination of this Agreement for any reason, Distributor shall
      discontinue the use of the Trademarks in Distributor’s trade name, or in
      connection with advertising, sales and promotion materials, or otherwise,
      promptly after the disposition of its remaining inventory of
      Products.  On or before the termination date, Distributor shall
      promptly provide Supplier with a detailed written inventory setting forth
      all Products and point-of-sale materials owned by and in the possession of
      Distributor which bear the Trademarks.  Distributor shall then
      make available to Supplier at Distributor’s warehouse or other facility,
      for the inspection by Supplier, all such Products and other
      materials.  Following Supplier’s receipt of such written
      inventory from Distributor and after a reasonable period of time within
      which Supplier may inspect such inventory, Supplier will itself promptly
      purchase or cause a third party to promptly purchase and take title to and
      possession of all such inventory and materials that are in good and
      merchantable condition, have a remaining shelf life that meets or exceeds
      industry standards, and are not otherwise obsolete or
      unusable.  The price to be paid by Supplier shall be the
      purchase price paid for such inventory and materials, plus other costs
      incurred by Distributor reasonably related to the acquisition and receipt
      of such inventory and materials, such as freight and insurance charges and
      any excise taxes, so as to arrive at Distributor’s laid-in cost of all
      such inventory and materials.  Notwithstanding the foregoing,
      visi-coolers, venders and other cold equipment bearing Trademarks shall be
      retained by and remain the property of Distributor, but Distributor shall
      promptly remove such Trademarks from all such
  equipment.

            

    

     

    In the
event Supplier elects not to renew this Agreement at the end of the initial term
or any renewal term, as provided in Paragraph 10.g below, and Distributor is not
otherwise in breach of this Agreement with the time to cure such breach having
expired, the parties stipulate and agree that Supplier shall pay Distributor,
prior to the effective date of expiration, as full compensation for any damages
suffered by Distributor by reason of such non-renewal or expiration, an amount
equal to [***] the product of:

     

    (i) the
Gross Profit Per Case earned by Distributor on the sale of Products during the
[***] (the “Calculation Period”); multiplied by

     

    (ii) the
sum of :

     

    (a) the
[***] plus

     

    (b) [***]
with respect to which an [***] was payable pursuant to [***] above.

     

    For
purposes of this Agreement, “Gross Profit Per Case” during the Calculation
Period shall mean:

     

    (i)
Distributor’s [***] during the Calculation Period, [***] to Distributor from
Supplier in the Calculation Period, [***] to Distributor from Supplier for such
Products; divided by

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        10

        
          

        

      

      
         

      

    

     

    (ii) the
[***] by Distributor during the Calculation Period.

     

    By way of
example, and not of limitation, if during the Calculation Period Distributor
sold [***] and its sales of those Products, [***] by
Supplier to Distributor during the Calculation Period totaled [***], and the
[***] during the Calculation Period was [***], then the Gross Profit per Case
would be $[***].

    

    The
amount to be paid to Distributor pursuant to this Section 6.d. shall be [***],
proportionately, with due account taken of the [***], for any period of time
that Supplier is [***] or otherwise [***] of the Products to Distributor.

    

    
      
        	
                 
      7.

              	
                Notices.

              

      

    

     

    For
purposes of this Agreement, all notices to the Supplier shall be addressed as
follows:

     

    Skinny
Nutritional Corporation

    3 Bala
Plaza East

    Suite
101

    Bala
Cynwyd, PA 19004

    Attn:
President

    

    With
a copy to:

     

    Stradley,
Ronon, Stevens & Young, LLP

    2600 One
Commerce Square

    Philadelphia,
PA 19103

    Attn:
William R. Sasso, Esquire

     

    For
purposes of this Agreement, all notices to Distributor shall be addressed as
follows:

     

    William
W. Wilson

    Pepsi-Cola
Bottling Company of New York, Inc.

    50-35
56th Road

    Maspeth,
New York  11378

     

    with
a copy to:

     

    [***]

    Pepsi-Cola
and National Brand Beverages, Ltd.

    8275 Route 130

    Pennsauken, NY 08110

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        11

        
          

        

      

      
         

      

    

     

    and
with a copy to:

     

    Andre R.
Jaglom, Esq.

    Tannenbaum
Helpern Syracuse & Hirschtritt LLP

    900 Third
Avenue

    New York,
NY  10022

    FAX:  (212)
371-1084

     

    All
notices pursuant to the terms of this Agreement shall be given by hand delivery
to the party, by overnight commercial courier service providing a receipt for
delivery, or by registered, certified or express United States mail, postage
prepaid, return receipt requested, and shall be effective upon
receipt.

     

    
      
        	
                 
      8.

              	
                Recalls.

              

      

    

     

    
      	
               
      

            	
              a.

            	
              If

            

    

     

    
      	
               
      

            	
              (i)

            	
              any
      government agency recommends or requires the recall of any Products or
      packaging; or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              either
      Supplier or Distributor reasonably determines that any Products or
      packaging should be recalled or should be withdrawn from distribution and
      sale;

            

    

     

    based
upon a determination that such Products or packaging are not fit for human
consumption, are contaminated, constitute a health hazard, are of substandard
quality or are otherwise not in a saleable condition, then Supplier and
Distributor shall coordinate the immediate cessation of sale and distribution
and/or the recall or withdrawal as necessary of all such Products or packaging
from the Territory. If necessary or advisable, Distributor and Supplier shall
cooperate to recall and/or reacquire the applicable Products or packaging from
any purchaser thereof.

     

    
      	
               
      

            	
              b.

            	
              If
      the problem at issue was not caused by Distributor, then Supplier shall
      pay the costs and expenses associated with any such recall, and Supplier
      shall indemnify Distributor for (i) its laid-in cost of all unsold
      recalled Products and packaging and the cost of returning such Products
      and packaging to Supplier or destroying them, as Supplier may elect; and
      (ii) its reasonable costs and expenses associated with such recall, which
      costs may include but are not limited to credits, refunds, or other
      payments by Distributor to its customers in connection
      therewith.  For purposes of this Agreement, “laid-in cost” shall
      include the invoice cost, insurance and freight for packaging and Products
      purchased in finished form by
Distributor.

            

    

     

    
      	
               
      

            	
              c.

            	
              If
      the problem at issue was caused by Distributor, then Distributor shall pay
      the costs and expenses associated with any such recall, and Distributor
      shall indemnify Supplier for its reasonable costs and expenses associated
      with such recall.

            

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        12

        
          

        

      

      
         

      

    

     

    
      
        	
                 
      9.

              	
                Force
      Majeure.

              

      

    

     

    Neither
party shall have any liability to the other for any failure to perform its
obligations under this Agreement by reason of events beyond its reasonable
control, including but not limited to strikes, lockouts, labor disputes, floods,
fires, war, terrorist acts or threats, hurricane, typhoon and other like extreme
weather, earthquake, lightning, explosion, riots, disturbance, civil commotion,
epidemics, embargoes, quotas, shortage of inventory due to crop failure,
shortage of labor, delays in transportation, or government action, including but
not limited to price controls, currency controls or detention of goods by
authorities (“Force Majeure”); provided, however, that the
parties shall perform their obligations to the maximum extent and as soon as
reasonably practicable.

     

    
      
        	
                 
      10.

              	
                Miscellaneous.

              

      

    

     

    
      	
               
      

            	
              a.

            	
              The
      indemnification, hold harmless and defense against claims provisions in
      this Agreement (including the provisions of Sections 5 and 8) shall
      survive the expiration, rescission or termination of this
      Agreement.

            

    

     

    
      	
               
      

            	
              b.

            	
              This
      Agreement does not constitute either party an agent or employee of the
      other.  Their relationship shall be that of independent
      contractors, and neither shall have any authority to bind the other by
      reason of this Agreement.

            

    

     

    
      	
               
      

            	
              c.

            	
              If
      for any reason any provision of this Agreement shall be deemed by any
      court, governmental agency, body or tribunal of competent jurisdiction to
      be legally invalid or unenforceable in any jurisdiction to which it
      applies, the validity of the remainder of the Agreement shall not be
      affected and such provision shall be deemed modified to the minimum extent
      necessary to make such provision consistent with applicable law, and, in
      its modified form, such provision shall then be enforceable and
      enforced.

            

    

     

    
      	
               
      

            	
              d.

            	
              The
      parties’ obligations under this Agreement shall be binding upon, and the
      parties’ rights under this Agreement shall inure to the benefit of, their
      respective permitted successors and
assigns.

            

    

     

    
      	
               
      

            	
              e.

            	
              This
      Agreement, represents the entire agreement between the parties hereto with
      respect to the subject matter hereof, and supersedes all prior
      arrangements, oral or written, on the same subject.  No term of
      this Agreement may be changed in any way except by a writing signed by
      both parties.

            

    

     

    
      	
               
      

            	
              f.

            	
              The
      waiver by Supplier or Distributor of any breach or default, or series of
      breaches or defaults, of any term or condition herein contained shall not
      be deemed a waiver of any continuing or subsequent breach or default of
      the same term or any other term or condition of this
      Agreement.

            

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        13

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              g.

            	
              This
      Agreement shall be for a term of seven (7) years from the date hereof and
      shall automatically be renewed for successive terms of seven (7) years
      unless either party provides notice of non-renewal at least 90 days prior
      to the end of the then current seven (7) year term, which would result in
      the Agreement being terminated effective as of the end of the then current
      seven (7) year term provided that in the event of notice of nonrenewal by
      Supplier, Supplier pays to Distributor prior to the expiration date the
      amount set forth in Section 6.e. above.   This Agreement
      may also be earlier terminated only as expressly provided in this
      Agreement.

            

    

     

    
      	
               
      

            	
              h.

            	
              This
      Agreement shall be construed, enforced and governed by the laws of the
      State of New York without regard to principles of conflict or choice of
      laws.  Any action or proceeding arising out of or in connection
      with this Agreement shall be heard in a federal or state court of
      appropriate subject matter jurisdiction located in County and State of New
      York, and the parties hereby agree to exclusive venue in, and consent to
      the personal jurisdiction of, such
courts.

            

    

     

    IN WITNESS WHEREOF, the
parties hereto have executed this Agreement effective as of the day first above
written.

     

    
      
        
          	
                  DISTRIBUTOR:

                	 
      	
                  SUPPLIER:

                
	 
      	 
      	 
      	 
      	 
      
	
                  By:

                	
                  /s/ J. H.

                	 
      	
                  By:

                	
                  /s/ Ronald D Wilson

                
	
                  Its
      (Title): Vice-President

                	 
      	
                  Its
      (Title):  Pres. and CEO

                
	 
      	 
      	 
      	 
      	 
      
	
                  Date:
      7/16/2009

                	 
      	
                  Date:
      7/15/2009

                

        

      

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        14

        
          

        

      

      
         

      

    

    EXHIBIT
“A”

     

    Trademarks

     

    “SKINNY
WATER”

     

    
      
        	
                Initials-Supplier:

              	 
      	
                Initials-Distributor:

              
	 
      	 
      	 
      
	
                /s/ RDW

              	 
      	
                /s/
JH

              

      

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
“B”

     

    Products

     

    
      
        	
                Skinny
      Water Lemonade Passionfruit

                Total
      V

              	 
      
	 
      	
                16oz
      Bottle

              	
                1
      82026 00027 8

              
	 
      	
                12
      Pack Single 16oz Bottles

              	
                1
      82026 00056 8

              
	 
      	 
      	 
      
	
                Skinny
      Water Raspberry Pomegranate

                Crave
      Control

              	 
      
	 
      	
                16oz
      Bottle

              	
                1
      82026 00033 9

              
	 
      	
                12
      Pack Single 16oz Bottles

              	
                1
      82026 00057 5

              
	 
      	 
      	 
      
	
                Skinny
      Water Goji Fruit Punch

                Shape

              	 
      
	 
      	
                16oz
      Bottle

              	
                1
      82026 00042 1

              
	 
      	
                12
      Pack Single 16oz Bottles

              	
                1
      82026 00058 2

              
	 
      	 
      	 
      
	
                Skinny
      Water Acai Grape BlueBerry

                Hi-Energy

              	 
      
	 
      	
                16oz
      Bottle

              	
                1
      82026 00048 3

              
	 
      	
                12
      Pack Single 16oz Bottles

              	
                1
      82026 00048 3

              
	 
      	 
      	 
      
	
                Skinny
      Water Peach Mango Mandarin

                XXX-Detox

              	 
      
	 
      	
                16oz
      Bottle

              	
                1
      82026 00030 8

              
	 
      	
                12
      Pack Single 16oz Bottles

              	
                1
      82026 00060 5

              
	 
      	 
      	 
      
	
                Skinny
      Water Orange Cranberry Tangerine

                Wake
      Up

              	 
      
	 
      	
                16oz
      Bottle

              	
                1
      82026 00061 2

              
	 
      	
                12
      Pack Single 16oz Bottles

              	
                1
      82026 00063 6

              

      

    

     

    
      
        	
                Initials-Supplier:

              	 
      	
                Initials-Distributor:

              
	 
      	 
      	 
      
	
                /s/ RDW

              	 
      	
                /s/
JH

              

      

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
“C”

     

    TERRITORY
DESCRIPTION

     

    
      
        	 	
                State

              	
                Counties

              
	 	 
      	 
      
	 	
                New
      York

              	
                Nassau

              
	 	 
      	 
      
	 	 
      	
                Suffolk

              
	 	 
      	 
      
	 	 
      	
                New
      York

              
	 	 
      	 
      
	 	 
      	
                Bronx

              
	 	 
      	 
      
	 	 
      	
                Kings

              
	 	 
      	 
      
	 	 
      	
                Queens

              
	 	 
      	 
      
	 	 
      	
                Richmond

              
	 	 
      	 
      
	 	 
      	
                Westchester

              
	 	 
      	 
      
	 	
                New
      Jersey

              	
                Bergen

              
	 	 
      	 
      
	 	 
      	
                Hudson

              
	 	 
      	 
      
	 	 
      	
                Essex

              
	 	 
      	 
      
	 	 
      	
                 [***]

              

      

    

    

    
      
        	
                Initials-Supplier:

              	 
      	
                Initials-Distributor:

              
	 
      	 
      	 
      
	
                /s/ RDW

              	 
      	
                /s/
JH

              

      

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

        

         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
“D”

    INITIAL ANNUAL MARKETING
PLAN

    

    
      	
               
      

            	
              1.

            	
              Temporary
      [***]shall be mutually agreed upon by Supplier and
      Distributor.  With respect to any “10 for $10” ads, each party
      will be responsible for [***].  With respect to any “10 for $10”
      ads beyond the [***] Supplier will [***].  If the price to a
      [***].

            

    

    

    For
example, and without limitation, assuming a “10 for $10” ad will result in a
[***] to the chain
customer (from an [***]),
each party will bear $[***].  For all “10
for $10” ads after [***],
Supplier will [***],
bringing Supplier’s support to $[***].  If the price
to a [***], Supplier will
[***].

    

    
      	
               
      

            	
              2.

            	
              Free
      case offers (e.g., ‘Buy 5 Get 1 Free’), shall be mutually agreed upon by
      Supplier and Distributor.  Each party will cover
      [***].

            

    

    

    For
example, assuming a 12-pack case price of [***] and Supplier and
Distributor agree to offer Buy 5 get 1 Free, Supplier and Distributor shall each
cover [***].  All funding by
Supplier will be based on a [***]to the customer; provided
that such suggested retail price [***]from Supplier to
Distributor.

    

    
      	
               
      

            	
              3.

            	
              Point-of-Sale
      materials (e.g., sales sheets, rail strips, static clings, shelf danglers,
      and the like) that are provided by Supplier will be paid at
      [***].

            

    

    

    
      	
               
      

            	
              4.

            	
              Supplier
      shall pay [***].

            

    

    

    
      	
               
      

            	
              5.

            	
              Supplier
      will pay [***] of the cost of free cases utilized for mutually agreed upon
      sales drives during the [***] days of the term for non-chain
      accounts.

            

    

    

    
      
        	
                Initials-Supplier:

              	 
      	
                Initials-Distributor:

              
	 
      	 
      	 
      
	
                /s/ RDW

              	 
      	
                /s/
JH

              

      

    

    
      
        
          [*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]Unassociated Document

     

    
      THIS AGREEMENT (this “Agreement”), dated
August 14, 2009 is entered into by and between NEOMEDIA TECHNOLOGIES INC., a
Delaware corporation (the “Company”), and YA GLOBAL INVESTMENTS, L.P.
(the “Buyer”).  Reference
is made to the Securities Purchase Agreement (the “Securities Purchase
Agreement”) dated as of July 29, 2008, as amended on April 6, 2009,
between the Company and the Buyer.  All capitalized terms used but not
defined herein shall have the meaning ascribed thereto in the Securities
Purchase Agreement.

      

      WHEREAS:

      

      
        	
                 
      

              	
                A.

              	
                Pursuant
      to the Securities Purchase Agreement, the Company has issued and the Buyer
      has purchased secured convertible debentures as well as additional secured
      convertible debentures.

              

      

      

      
        	
                 
      

              	
                B.

              	
                The
      Company desires to issue, and the Buyer desires to purchase a another
      additional convertible debenture in the form attached hereto as Exhibit A
      (the “Fifth
      Additional Debenture”).

              

      

      

      
        	
                 
      

              	
                C.

              	
                In
      order to induce the Company to issue and the Buyer to purchase the Fifth
      Additional Debenture, the parties desire to enter into this
      Agreement.

              

      

      

      NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Buyer hereby agree as
follows:

      

      1.     Purchase and Sale of Fifth
Additional Debenture.  In reliance on the representations and
warranties and the terms and conditions set forth in this Agreement, on the date
hereof the Buyer shall purchase, and the Company shall issue and sell the Fifth
Additional Debenture with a face amount of $475,000 for a purchase price of
$475,000.  The Fifth Additional Debenture shall be in the form
attached hereto as Exhibit
A.  The Fifth Additional Debenture shall be deemed to be
included in term “Convertible Debentures” as used in the Securities Purchase
Agreement and the other Transaction Documents.  Upon the issuance of
the Fifth Additional Debenture the Buyer shall pay the purchase price, minus any
fees or expenses to be deducted from the purchase price as set forth below, by
wire transfer of immediately available funds in accordance with instructions to
be provided by the Company.

      

      2.     Representations and
Warranties of Buyer.

      

      (a)     The
representations and warranties of the Buyer set forth in Section 2 of the
Securities Purchase Agreement are hereby incorporated by reference with such
changes necessary to relate to this Agreement as if set forth in their entirety
herein (the “Buyer
Representations and Warranties”).  For the avoidance of doubt,
in the Buyer Representations and Warranties references to “Securities” shall be
deemed references to the Fifth Additional Debenture and the shares of Common
Stock issuable upon conversion thereof, references to “Conversion Shares” shall
be deemed to reference the shares of Common Stock issuable upon conversion of
the Fifth Additional Debenture, and any reference to “Transaction Documents”
shall be deemed to include a reference to this Agreement and to the Fifth
Additional Debenture.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (b)     The
Buyer hereby represents and warrants that except as may otherwise be disclosed
on a disclosure schedule attached hereto, the Buyer Representations and
Warranties are true and correct on the date hereof (except for representations
and warranties that speak as of a specific date).

      

      3.     Representations, Warranties,
and Covenants of Company.

      

      (a)     The
representations and warranties of the Company set forth in Section 3 of the
Securities Purchase Agreement are hereby incorporated by reference with such
changes necessary to relate to this Agreement as if set forth in their entirety
herein (the “Company
Representations and Warranties”).  For the avoidance of doubt,
in the Company Representations and Warranties references to “Securities” shall
be deemed references to the Fifth Additional Debenture and the shares of Common
Stock issuable upon conversion thereof, references to “Conversion Shares” shall
be deemed to reference the shares of Common Stock issuable upon conversion of
the Fifth Additional Debenture, references to “Convertible Debenture” shall be
deemed to reference the Fifth Additional Debenture, and any reference to
“Transaction Documents” shall be deemed to include a reference to this Agreement
and to the Fifth Additional Debenture.

      

      (b)     The
Company hereby represents and warrants that except as disclosed in the Officer’s
Certificates dated April 6, 2009 and May 1, 2009 which are herein incorporated
by reference, in their entirety, with the exception of the disclosure schedule
attached hereto as Exhibit B or as set forth in the SEC Documents, such Company
Representations and Warranties are true and correct on the date hereof (except
for Company Representations and Warranties that speak as of a specific
date).

      

      4.     Security Interest Granted
Pursuant to Security Documents.     The Company
agrees and acknowledges (i) that its obligations under the Fifth Additional
Debenture shall be secured by all collateral granted by the Company to the
Buyer, including, without limitation, the assets of the Company pledged to the
Buyer pursuant to (a) that certain Security Agreement dated July 29, 2008 by and
between the Company and the Buyer (the “Security Agreement”)
and (b) that certain Intellectual Property Security Agreement dated July 29,
2008 by and between the Company and the Buyer (the “IP Security
Agreement,” and collectively along with the Security Agreement, the
“Security
Documents”), and (ii) that the obligations under the Fifth Additional
Debenture are hereinafter expressly included as part of the “Obligations” as
such term is defined and used in the Security Documents.

      

      5.     Covenants.

      

      (a)     The
Company hereby acknowledges and agrees that nothing contained herein, in the
Fifth Additional Debenture, or in any of the documents executed in connection
with the Fifth Additional Debenture shall operate as or be deemed to constitute
a cure or waiver of any default or events of default under any of the
Transaction Documents, including, without limitation, any default or events of
default whether now existing or hereafter arising.

      

      (b)     The
Company hereby acknowledges and agrees that it remains liable to the Buyer for
the payment and performance of all amounts due under the Convertible Debentures
issued pursuant to the Securities Purchase Agreement and the amendment thereto
dated April 6, 2209, as well as the additional debentures issued on June 5, 2009
and July 15, 2009, without offset, defense or counterclaim of any kind, nature
or description whatsoever.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      (c)     The
Company hereby ratifies, confirms, and reaffirms, all and singular the
representations, warranties, terms, and conditions set forth in the Securities
Purchase Agreement, the Convertible Debentures, and each of the other
Transaction Documents, and further acknowledges and agrees that all terms and
conditions of the Securities Purchase Agreement, the Convertible Debentures, and
the other Transaction Documents shall remain in full force and
effect.

      

      (d)     Fees and Expenses.
The Company shall deposit into escrow $25,000 directly from the proceeds of the
closing of the purchase and sale of the Fifth Additional Debenture hereunder
(the “Additional
Monitoring Fee,” and as deposited into escrow, the “Additional Escrow
Funds”) which shall be used to compensate the Investment Manager for
monitoring and managing the purchase and investment made by the Buyer
hereunder.  The Additional Escrow Funds shall be held by the Escrow
Agent in accordance with the Escrow Agreement and disbursed to the Investment
Manager periodically in accordance with the Escrow Agreement and the exhibits
thereto.

      

      6.     Other Agreements.
Except as modified pursuant hereto, no other changes or modifications to the
Transaction Documents are intended or implied and in all other respects the
Transaction Documents are hereby specifically ratified, restated and confirmed
by all parties hereto as of the effective date hereof.  To the extent
of conflict between the terms of this Agreement and the other Transaction
Documents, the terms of this Agreement shall control.

      
 

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          3

          
            

          

        

        
           

        

      

      
 

      

      IN WITNESS WHEREOF, the
parties have caused this Agreement to be duly executed as of date first above
written.

      
        
          	 
      	
                  COMPANY:

                
	 
      	
                  NEOMEDIA
      TECHNOLOGIES INC.

                
	 
      	 
      
	 
      	
                  By:           /s/ Michael W.
      Zima                        
      

                
	 
      	
                  Name:  Michael
      W. Zima

                
	 
      	
                  Title:                      Chief
      Financial Officer

                
	 
      	 
      
	 
      	 
      
	 
      	
                  BUYER:

                
	 
      	
                  YA
      GLOBAL INVESTMENTS, L.P.

                
	 
      	
                  By:  Yorkville
      Advisors, LLC

                
	 
      	
                           its
      Investment Manager

                
	 
      	 
      
	 
      	
                  By:         
      /s/ Gerald
      Eicke                                
      

                
	 
      	
                  Name:  Gerald
      Eicke

                
	 
      	
                  Title:    Managing
      Member

                

        

      

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      

      Exhibit
A

      

      Form of Fifth Additional
Debenture

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