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_______________________
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____________________
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Name of
Subscriber
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Memorandum
No.
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SUBSCRIPTION AGREEMENT
SKINNY NUTRITIONAL CORP.
Private Sale of
Securities
Consisting of up to 25,000,000
Shares of Common Stock
Aggregate Offering Amount:
$1,500,000
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
117
Bala Cynwyd, Pennsylvania
19004
Tel. (610) 784-2000
November 17, 2008
CONFIDENTIAL SUBSCRIPTION
AGREEMENT
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:
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, 11
th Floor
New York, New York 10006
THE FOLLOWING EXHIBIT IS ANNEXED
TO
AND FORMS PART OF THIS
SUBSCRIPTION AGREEMENT:
EXHIBIT A:
INVESTOR QUESTIONNAIRE
SUBSCRIPTION
AGREEMENT
The undersigned (the “Subscriber” or
the “Purchaser”) hereby subscribes to purchase from
Skinny Nutritional Corp., a Nevada corporation (the
“Company”), certain of the Company’s securities,
as described herein, for a total purchase price of $1,500,000 (the
“Purchase Price”). The Company is offering hereby (the
“Offering”) a maximum of 25,000,000 shares of its
Common Stock (the “Common Shares” or
“Securities”).
Article I
SALE OF
SECURITIES
1.1 Sale
of Securities; Offering Period
(a)
Subject
to the terms and conditions hereof and on the basis of the
representations and warranties hereinafter set forth, the Company
hereby agrees to issue and sell to the Subscriber and the
Subscriber agrees to purchase from the Company, upon Closing, the
Securities as described herein for the Purchase Price as set forth
on the signature page of this Subscription Agreement executed by
the Subscriber. The number of Common 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 25,000,000
Common Shares, par value $.001 per share. The Securities are being
offered at a purchase price of $0.06 per share (the “Purchase
Price”). This Offering is only being made to
“accredited investors” (as defined in Rule 501 under
the Securities Act of 1933, as amended (the “Securities
Act”)) in reliance upon an exemption from registration under
Section 4(2) of the Securities Act and/or Regulation D promulgated
thereunder, and on similar exemptions under applicable state
laws. The Securities may be purchased, in part or their
entirety, by officers and directors of the Company.
(b)
In
the sole discretion of the Company, the Company may elect to
increase the total number of increase the maximum number of Common
Shares being offered from $1,500,000 of Shares up to a maximum of
$1,875,000 of Common Shares. In the event the Company elects to
exercise this oversubscription right, the Company would issue an
additional 6,250,000 Common Shares.
(c)
The
Securities are being offering during the offering period commencing
on November 17, 2008 and terminating on the earlier of (a) 5:00
p.m. (New York time) on December 31, 2008, unless extended by an
additional 60 days, or (b) the date on which all Securities
authorized for sale have been sold (the “Offering
Period”).
1.2
High Risk Investment. This investment is speculative and
should only be made by investors who can afford the risk of loss of
their entire investment. The proceeds from the sale of the
Securities will be used to fund short term capital needs to enable
the Company to maintain operations until additional funding is
received. The Company intends to sell additional shares of Common
Stock after the completion of this transaction to further fund its
operations. Unless the Company is successful in completing these
additional funding transactions, 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 Units and pay
commissions and other compensation to the Selling Agents who
procure purchasers of the Units. 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.
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, 11
th 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.
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 Common 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 Investor 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. The Company’s (i) Annual Report on Form
10-KSB for the fiscal year ended December 31, 2007 (the
“Annual Report”); and (ii) Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 2008 (the
“Quarterly Report”) have been filed by the Company with
the Securities and Exchange Commission through the
Commission’s EDGAR website and are incorporated into this
Subscription Agreement by reference. Such reports comprise an
integral part of this Agreement and each Subscriber is urged to
read each such report in its entirety. Such reports may be
collectively referred to herein as the “SEC
Reports”.
1.8
Subscriber Information
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Name(s)
of
SUBSCRIBER(s): _____________________
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___________________________________
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___________________________________
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Principal
Amount of Securities
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Subscribed
for:
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$__________
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(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):
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a bank as
defined in Section 3(a)(2) of the Act;
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a savings and
loan association or other institution as defined in Section
3(a)(5)(A) of the Act;
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a broker or
dealer registered pursuant to Section 15 of the Securities Exchange
Act of 1934 as amended (the “Exchange Act”);
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an insurance
company as defined in Section 2(13) of the Act;
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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;
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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;
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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;
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a private
business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940, as amended;
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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;
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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;
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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;
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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
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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.)
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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
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a director or
officer of the Company.
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(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.
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
certificate of incorporation, bylaws or other organizational or
charter documents. The Company is duly qualified to transact the
business in which it is engaged and is in good standing as a
foreign corporation in every jurisdiction in which its ownership,
leasing, licensing or use of property or assets or the conduct of
its business make such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be,
could not, individually or in the aggregate, have or reasonably be
expected to result in (i) a material and adverse effect on the
legality, validity or enforceability of this Agreement, (ii) a
material and adverse effect on the results of operations, assets,
prospects, business or condition (financial or otherwise) of the
Company, taken as a whole, or (iii) an adverse impairment to the
Company’s ability to perform on a timely basis its
obligations hereunder (any of (i), (ii) or (iii), a “Material
Adverse Effect”).
(B) The
Company is currently authorized to issue 250,000,000 shares of
Common Stock, $.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, to issue and sell the Securities and deliver the Shares
and Warrants, 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. 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) any filings required by state securities
laws, (ii) the filing of a Notice of a Sale of Securities on Form D
with the Commission under Regulation D of the Securities Act, (iii)
those that have been made or obtained prior to or contemporaneously
with the date of this Agreement and (iv) filings pursuant to the
Securities and Exchange Act of 1934, as amended.
(E) The
execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions
contemplated hereby 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
Common 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, will not be issued in
violation of any preemptive or other rights of stockholders, and
will be issued free and clear of all liens and encumbrances, other
than restrictions on transfer under applicable securities
laws.
(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 a
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