Exhibit 10.12

SECURITIES PURCHASE AGREEMENT

        SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of February
20, 2008, by and among Amish Naturals, Inc., a Nevada corporation, with
headquarters located at 8224 County Road 245, Holmesville, Ohio 44633
(the “Company”), and the investors listed on the Schedule of Buyers attached
hereto (individually, a “Buyer” and collectively, the “Buyers”).

      WHEREAS:

    A.            The Company and each Buyer is executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and
Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “SEC”) under the 1933 Act.

    B.            The Company has authorized a new series of senior secured
convertible notes of the Company which notes shall be convertible into the
Company’s common stock, par value $0.001 per share (the “Common Stock”), in
accordance with the terms of the Notes (as defined below).

    C.            Each Buyer wishes to purchase, and the Company wishes to sell,
upon the terms and conditions stated in this Agreement, (i) that aggregate
principal amount of the Notes, in substantially the form attached hereto as
Exhibit A (the “Notes”), set forth opposite such Buyer’s name in column (3) on
the Schedule of Buyers attached hereto (which aggregate amount for all Buyers
shall be $3,125,000) (as converted, collectively, the “Conversion Shares”), (ii)
warrants, in substantially the form attached hereto as Exhibit B-1 (the “Series
E Warrants”), to acquire that number of shares of Common Stock set forth
opposite such Buyer’s name in column (4) on the Schedule of Buyers (as
exercised, collectively, the “Series EWarrant Shares”) and (iii) warrants, in
substantially the form attached hereto as Exhibit B-2 (the “Series F Warrants”,
and together with the Series E Warrants, the “Warrants”), to acquire that number
of shares of Common Stock set forth opposite such Buyer’s name in column (5) on
the Schedule of Buyers (as exercised, collectively, the “Series FWarrant
Shares”, and together with the Series E Warrant Shares, the “Warrant Shares”).

    D.            The Notes bear interest, which at the option of the Company,
subject to certain conditions, may be paid in shares of Common Stock (the
“Interest Shares”).

    E.            Concurrently with the Closing (as defined below), the parties
hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit C (the “Registration Rights
Agreement”), pursuant to which the Company has agreed to provide certain
registration rights with respect to the Registrable Securities (as defined in
the Registration Rights Agreement) under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.

    F.            The Notes, the Conversion Shares, the Interest Shares, the
Warrants and the Warrant Shares collectively are referred to herein as the
“Securities”.

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    G.            The Notes will rank senior to all outstanding and future
indebtedness of the Company, other than Permitted Senior Indebtedness (as
defined in the Notes), and will be secured by a perfected security interest in
all of the assets of the Company and the stock, equity interests and assets of
each of the Company’s subsidiaries, as evidenced by (i) a pledge agreement, in
the form attached hereto as Exhibit D (as amended or modified from time to time
in accordance with its terms, the “Pledge Agreement”), (ii) a security
agreement, in the form attached hereto as Exhibit E (as amended or modified from
time to time in accordance with its terms, the “Security Agreement”), and (iii)
the guaranties of the subsidiaries of the Company in the form attached hereto as
Exhibit F (as amended or modified from time to time in accordance with its
terms, the “Guaranty” and, together with the Pledge Agreement, the Security
Agreement and any ancillary documents related thereto, collectively the
“Security Documents”).

        NOW, THEREFORE, the Company and each Buyer hereby agree as follows:

    1.           PURCHASE AND SALE OF NOTES AND WARRANTS.

               (a)           Purchase of Notes and Warrants. Subject to the
satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below,
the Company shall issue and sell to each Buyer, and each Buyer severally, but
not jointly, agrees to purchase from the Company on the Closing Date (as defined
below), (x) a principal amount of Notes as is set forth opposite such Buyer’s
name in column (3) on the Schedule of Buyers, (y) Series E Warrants to acquire
that number of Series E Warrant Shares as is set forth opposite such Buyer’s
name in column (4) on the Schedule of Buyers (z) Series F Warrants to acquire
that number of Series F Warrant Shares as is set forth opposite such Buyer’s
name in column (5) on the Schedule of Buyers (the “Closing”).

               (b)           Closing. The date and time of the Closing (the
“Closing Date”) shall be 10:00 a.m., New York City time, on the date hereof (or
such later date as is mutually agreed to by the Company and each Buyer) after
notification of satisfaction (or waiver) of the conditions to the Closing set
forth in Sections 6 and 7 below at the offices of Schulte Roth & Zabel LLP, 919
Third Avenue, New York, New York 10022.

               (c)           Prepaid Interest; Purchase Price.

                          (i)           Prepaid Interest. The Company shall
prepay the interest payable under the Notes through the second anniversary of
the Closing Date in such amount set forth opposite such Buyer’s name in column
(6) of the Schedule of Buyers (for each such Buyer, its “Prepaid Interest”)
which Prepaid Interest shall be nonrefundable.

                          (ii)           Purchase Price. The aggregate purchase
price for the Notes and the Warrants to be purchased by each such Buyer at the
Closing (the “Purchase Price”) shall be the amount set forth opposite each
Buyer’s name in column (7) of the Schedule of Buyers. Each Buyer shall pay
$1,000 for each $1,000 of principal amount of Notes and related Warrants to be
purchased by such Buyer at the Closing.

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               (d)           Form of Payment. On the Closing Date, (i) each
Buyer shall pay its Purchase Price less its Prepaid Interest (such net amount as
set forth opposite such Buyer’s name in column (8) of the Schedule of Buyers,
its “Net Purchase Price”) to the Company for the Notes and the Warrants to be
issued and sold to such Buyer at the Closing, by wire transfer of immediately
available funds in accordance with the Company’s written wire instructions and
(ii) the Company shall deliver to each Buyer the Notes (allocated in the
principal amounts as such Buyer shall request) which such Buyer is then
purchasing hereunder along with the Warrants (allocated in the amounts as such
Buyer shall request) which such Buyer is purchasing, in each case duly executed
on behalf of the Company and registered in the name of such Buyer or its
designee.

               (e)           Consent. Castlerigg Master Investments Ltd.
(“Castlerigg”), as the majority holder of the September Notes (as defined in the
Notes), hereby consents to the transactions contemplated hereby, including,
without limitation, the issuance of the Notes and Warrants and agrees that (x)
the Notes shall constitute Permitted Indebtedness (as defined in the Existing
Notes) under the Existing Notes and the definition of ” Permitted Indebtedness”
in the Existing Notes is hereby deemed to be amended to include all indebtedness
under the Notes and (y) any liens with respect to the Security Documents shall
constitute Permitted Liens (as defined in the Existing Notes) under the Existing
Notes and the definition of “Permitted Liens” in the Existing Notes is hereby
deemed to be amended to include all liens granted to the holders of the Notes
pursuant to the Security Documents.

               (f)           September Antidilution Adjustments. The Company and
Castlerigg hereby agree that for purposes of clarification, the provisions set
forth in Section 7(a) of the September Notes and Section 2(a) of each of the
warrants to purchase Common Stock issued pursuant to the September Securities
Purchase Agreement (as defined in the Notes), the consideration received by the
Company for each share of Common Stock issuable upon conversion of the Notes or
exercise of any of the Warrants shall equal the quotient of (i) the sum of (x)
the aggregate number of Conversion Shares issuable upon conversion of the Notes
and (y) the aggregate number of Warrant Shares issuable upon exercise of the
Warrants, divided by (ii) the sum of (x) the Purchase Price and (y) the
aggregate exercise price of the Warrants, and no further adjustment will be due
upon conversion of the Notes or exercise of the Warrants in accordance with the
terms thereof on the Closing Date.

    2.           BUYER’S REPRESENTATIONS AND WARRANTIES. Each Buyer, severally
and not jointly, represents and warrants with respect to only itself that:

               (a)           No Public Sale or Distribution. Such Buyer is (i)
acquiring the Notes and the Warrants and (ii) upon conversion of the Notes and
exercise of the Warrants (other than pursuant to a Cashless Exercise (as defined
in the Warrants)) will acquire the Conversion Shares issuable upon conversion of
the Notes and the Warrant Shares issuable upon exercise of the Warrants, for its
own account and not with a view towards, or for resale in connection with, the
public sale or distribution thereof, except pursuant to sales registered or
exempted under the 1933 Act; provided, however, that by making the
representations herein, such Buyer does not agree to hold any of the Securities
for any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act. Such Buyer is acquiring the
Securities hereunder in the ordinary course of its business. Such Buyer does not
presently have any agreement or understanding, directly or indirectly, with any
Person to distribute any of the Securities.

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               (b)           Accredited Investor Status. Such Buyer is an
“accredited investor” as that term is defined in Rule 501(a) of Regulation D.

               (c)           Reliance on Exemptions. Such Buyer understands that
the Securities are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Company is relying in part upon the truth and
accuracy of, and such Buyer’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Buyer set forth herein in
order to determine the availability of such exemptions and the eligibility of
such Buyer to acquire the Securities.

               (d)           Information. Such Buyer and its advisors, if any,
have been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Securities which have been requested by such Buyer. Such Buyer and its advisors,
if any, have been afforded the opportunity to ask questions of the Company.
Neither such inquiries nor any other due diligence investigations conducted by
such Buyer or its advisors, if any, or its representatives shall modify, amend
or affect such Buyer’s right to rely on the Company’s representations and
warranties contained herein. Such Buyer understands that its investment in the
Securities involves a high degree of risk. Such Buyer has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the Securities.

               (e)           No Governmental Review. Such Buyer understands that
no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities
or the fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

               (f)           Transfer or Resale. Such Buyer understands that
except as provided in the Registration Rights Agreement: (i) the Securities have
not been and are not being registered under the 1933 Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, (B) such Buyer shall have delivered to the
Company an opinion of counsel, in a generally acceptable form, to the effect
that such Securities to be sold, assigned or transferred may be sold, assigned
or transferred pursuant to an exemption from such registration, or (C) such
Buyer provides the Company with reasonable assurance that such Securities can be
sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated
under the 1933 Act, as amended, (or a successor rule thereto) (collectively,
“Rule 144”); (ii) any sale of the Securities made in reliance on Rule 144 may be
made only in accordance with the terms of Rule 144 and further, if Rule 144 is
not applicable, any resale of the Securities under circumstances in which the
seller (or the Person (as defined in Section 3(s)) through whom the sale is
made) may be deemed to be an underwriter (as that term is defined in the 1933
Act) may require compliance with some other exemption under the 1933 Act or the
rules and regulations of the SEC thereunder; and (iii) neither the Company nor
any other Person is under any obligation to register the Securities under the
1933 Act or any state securities laws or to comply with the terms and conditions
of any exemption thereunder. The Securities may be pledged in connection with a
bona fide margin account or other loan or financing arrangement secured by the
Securities and such pledge of Securities shall not be deemed to be a transfer,
sale or assignment of the Securities hereunder, and no Buyer effecting a pledge
of Securities shall be required to provide the Company with any notice thereof
or otherwise make any delivery to the Company pursuant to this Agreement or any
other Transaction Document (as defined in Section 3(b)), including, without
limitation, this Section 2(f).

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               (g)           Legends. Such Buyer understands that the
certificates or other instruments representing the Notes and the Warrants and,
until such time as the resale of the Conversion Shares and the Warrant Shares
have been registered under the 1933 Act as contemplated by the Registration
Rights Agreement, the stock certificates representing the Conversion Shares and
the Warrant Shares, except as set forth below, shall bear any legend as required
by the “blue sky” laws of any state and a restrictive legend in substantially
the following form (and a stop-transfer order may be placed against transfer of
such stock certificates):

  [NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE]
[EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped or issue to such holder by electronic delivery at the applicable balance
account at DTC (as defined below), unless otherwise required by state securities
laws, (i) such Securities are registered for resale under the 1933 Act, (ii) in
connection with a sale, assignment or other transfer, such holder provides the
Company with an opinion of counsel, in a generally acceptable form, to the
effect that such sale, assignment or transfer of the Securities may be made
without registration under the applicable requirements of the 1933 Act, or (iii)
such holder provides the Company with reasonable assurance that the Securities
can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A.

               (h)           Validity; Enforcement. This Agreement, the
Registration Rights Agreement and the Security Documents to which such Buyer is
a party have been duly and validly authorized, executed and delivered on behalf
of such Buyer and shall constitute the legal, valid and binding obligations of
such Buyer enforceable against such Buyer in accordance with their respective
terms, except as such enforceability may be limited by general principles of
equity or to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors’ rights and remedies.

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               (i)           No Conflicts. The execution, delivery and
performance by such Buyer of this Agreement, the Registration Rights Agreement
and the Security Documents to which such Buyer is a party and the consummation
by such Buyer of the transactions contemplated hereby and thereby will not (i)
result in a violation of the organizational documents of such Buyer or (ii)
conflict with, or constitute a default (or an event which 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 of, any agreement,
indenture or instrument to which such Buyer is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws) applicable to such Buyer, except in the case
of clauses (ii) and (iii) above, for such conflicts, defaults, rights or
violations which would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of such Buyer to
perform its obligations hereunder.

               (j)           Residency. Such Buyer is a resident of that
jurisdiction specified below its address on the Schedule of Buyers.

    3.           REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

               The Company represents and warrants to each of the Buyers that:

               (a)           Organization and Qualification. Each of the Company
and its “Subsidiaries” (which for purposes of this Agreement means any entity in
which the Company, directly or indirectly, owns any of the capital stock or
holds an equity or similar interest) are entities duly organized and validly
existing in good standing under the laws of the jurisdiction in which they are
formed, and have the requisite power and authorization to own their properties
and to carry on their business as now being conducted. Each of the Company and
its Subsidiaries is duly qualified as a foreign entity to do business and is in
good standing in every jurisdiction in which its ownership of property or the
nature of the business conducted by it makes such qualification necessary,
except to the extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect. As used in this Agreement, “Material
Adverse Effect” means any material adverse effect on the business, properties,
assets, operations, results of operations, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries, taken as a whole, or on the
transactions contemplated hereby and the other Transaction Documents or by the
agreements and instruments to be entered into in connection herewith or
therewith, or on the authority or ability of the Company to perform its
obligations under the Transaction Documents (as defined below). The Company has
no Subsidiaries except as set forth on Schedule 3(a).

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               (b)           Authorization; Enforcement; Validity. The Company
has the requisite power and authority to enter into and perform its obligations
under this Agreement, the Notes, the Registration Rights Agreement, the Security
Documents, each of the Lock-Up Agreements (as defined below), the Irrevocable
Transfer Agent Instructions (as defined in Section 5(b)), the Warrants, and each
of the other agreements entered into by the parties hereto in connection with
the transactions contemplated by this Agreement (collectively, the “Transaction
Documents”) and to issue the Securities in accordance with the terms hereof and
thereof. The execution and delivery of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby, including, without limitation, the issuance of the Notes and the
Warrants, the reservation for issuance and the issuance of the Conversion
Sharesissuable upon conversion of the Notes, the reservation for issuance and
issuance of Warrant Shares issuable upon exercise of the Warrants, the
reservation for issuance and issuance of Interest Shares, if any, and the
granting of a security interest in the Collateral (as defined in the Security
Documents) have been duly authorized by the Company’s Board of Directors and
(other than (i) the filing of appropriate UCC financing statements with the
appropriate states and other authorities pursuant to the Security Agreement, and
(ii) the filing with the SEC of one or more Registration Statements in
accordance with the requirements of the Registration Rights Agreement) no
further filing, consent, or authorization is required by the Company, its Board
of Directors or its stockholders. This Agreement and the other Transaction
Documents of even date herewith have been duly executed and delivered by the
Company, and constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies.

               (c)           Issuance of Securities. The issuance of the Notes
and the Warrants are duly authorized and are free from all taxes, liens and
charges with respect to the issue thereof. As of the Closing, a number of shares
of Common Stock shall have been duly authorized and reserved for issuance which
equals or exceeds 130% of the aggregate of the maximum number of shares of
Common Stock (i) issuable upon conversion of the Notes, (ii) as Interest Shares
pursuant to the terms of the Notes and (iii) upon exercise of the Warrants
(without taking into account any limitations on the Conversion of the Notes or
exercise of the Warrants set forth in the Notes and Warrants, respectively).
Upon conversion or payment in accordance with the Notes or exercise in
accordance with the Warrants, as the case may be, the Conversion Shares, the
Interest Shares and the Warrant Shares, respectively, will be validly issued,
fully paid and nonassessable and free from all preemptive or similar rights,
taxes, liens and charges with respect to the issue thereof, with the holders
being entitled to all rights accorded to a holder of Common Stock. The offer and
issuance by the Company of the Securities is exempt from registration under the
1933 Act.

               (d)           No Conflicts. The execution, delivery and
performance of the Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby (including,
without limitation, the issuance of the Notes and the Warrants, the granting of
a security interest in the Collateral and reservation for issuance and issuance
of the Conversion Shares, the Interest Shares and the Warrant Shares) will not
(i) result in a violation of any certificate of incorporation, certificate of
formation, any certificate of designations or other constituent documents of the
Company or any of its Subsidiaries, any capital stock of the Company or any of
its Subsidiaries or the bylaws of the Company or any of its Subsidiaries or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) in any respect under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including foreign, federal and state
securities laws and regulations and the rules and regulations The OTC Bulletin
Board (the “Principal Market”)) applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected.

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               (e)           Consents. Neither the Company nor any of its
Subsidiaries is required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its obligations under or contemplated by the
Transaction Documents, in each case in accordance with the terms hereof or
thereof. All consents, authorizations, orders, filings and registrations which
the Company is required to obtain pursuant to the preceding sentence have been
obtained or effected on or prior to the Closing Date, and the Company and its
Subsidiaries are unaware of any facts or circumstances which might prevent the
Company from obtaining or effecting any of the registration, application or
filings pursuant to the preceding sentence. The Company is not in violation of
the listing requirements of the Principal Market and has no knowledge of any
facts which would reasonably lead to delisting or suspension of the Common Stock
in the foreseeable future.

               (f)           Acknowledgment Regarding Buyer’s Purchase of
Securities. The Company acknowledges and agrees that each Buyer is acting solely
in the capacity of arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and thereby and that no Buyer
is (i) an officer or director of the Company, (ii) an “affiliate” of the Company
or any of its Subsidiaries (as defined in Rule 144) or (iii) to the knowledge of
the Company, a “beneficial owner” of more than 10% of the shares of Common Stock
(as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934,
as amended (the “1934 Act”)). The Company further acknowledges that no Buyer is
acting as a financial advisor or fiduciary of the Company or any of its
Subsidiaries (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated hereby and thereby, and any advice
given by a Buyer or any of its representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is
merely incidental to such Buyer’s purchase of the Securities. The Company
further represents to each Buyer that the Company’s decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives.

               (g)           No General Solicitation; Placement Agent’s Fees.
Neither the Company, nor any of its Subsidiaries or affiliates, nor any Person
acting on its or their behalf, has engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D) in connection with
the offer or sale of the Securities. The Company shall be responsible for the
payment of any placement agent’s fees, financial advisory fees, or brokers’
commissions (other than for persons engaged by any Buyer or its investment
advisor) relating to or arising out of the transactions contemplated hereby. The
Company shall pay, and hold each Buyer harmless against, any liability, loss or
expense (including, without limitation, attorney’s fees and out-of-pocket
expenses) arising in connection with any such claim. The Company acknowledges
that it has engaged Wharton Capital as placement agent (the “Placement Agent”)
in connection with the sale of the Securities. Other than the Placement Agent,
the Company has not engaged any placement agent or other agent in connection
with the sale of the Securities.

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               (h)           No Integrated Offering. None of the Company, its
Subsidiaries, any of their affiliates, and any Person acting on their behalf
has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would require
registration of any of the Securities under the 1933 Act or cause this offering
of the Securities to be integrated with prior offerings by the Company for
purposes of the 1933 Act or any applicable stockholder approval provisions,
including, without limitation, under the rules and regulations of any exchange
or automated quotation system on which any of the securities of the Company are
listed or designated. None of the Company, its Subsidiaries, their affiliates
and any Person acting on their behalf will take any action or steps referred to
in the preceding sentence that would require registration of any of the
Securities under the 1933 Act or cause the offering of the Securities to be
integrated with other offerings.

               (i)           Dilutive Effect. The Company understands and
acknowledges that the number of Conversion Shares issuable upon conversion of
the Notes and the Warrant Shares issuable upon exercise of the Warrants will
increase in certain circumstances. The Company further acknowledges that its
obligation to issue Conversion Shares upon conversion of the Notes in accordance
with this Agreement and the Notes and its obligation to issue the Warrant Shares
upon exercise of the Warrants in accordance with this Agreement and the Warrants
is, in each case, is absolute and unconditional regardless of the dilutive
effect that such issuance may have on the ownership interests of other
stockholders of the Company.

               (j)           Application of Takeover Protections; Rights
Agreement. The Company and its board of directors have taken all necessary
action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Articles of
Incorporation or the laws of the jurisdiction of its formation which is or could
become applicable to any Buyer as a result of the transactions contemplated by
this Agreement, including, without limitation, the Company’s issuance of the
Securities and any Buyer’s ownership of the Securities. The Company has not
adopted a stockholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock or a change in control of
the Company.

               (k)           SEC Documents; Financial Statements. Except as
disclosed in Schedule 3(k), during the two (2) years prior to the date hereof,
the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements, notes and
schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the “SEC Documents”). The Company has delivered to
the Buyers or their respective representatives true, correct and complete copies
of the SEC Documents not available on the EDGAR system. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the 1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. As of their respective dates, the
financial statements of the Company included in the SEC Documents complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). No other information provided by or on behalf of the Company to
the Buyers which is not included in the SEC Documents, including, without
limitation, information referred to in Section 2(d) of this Agreement, contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading.

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               (l)           Absence of Certain Changes. Except as disclosed in
Schedule 3(l), since September 30, 2007, there has been no material adverse
change and no material adverse development in the business, properties,
operations, condition (financial or otherwise), results of operations or
prospects of the Company or its Subsidiaries. Except as disclosed in Schedule
3(l), since September 30, 2007, the Company has not (i) declared or paid any
dividends, (ii) sold any assets, individually or in the aggregate, in excess of
$100,000 outside of the ordinary course of business or (iii) had capital
expenditures, individually or in the aggregate, in excess of $100,000. Neither
the Company nor any of its Subsidiaries has taken any steps to seek protection
pursuant to any bankruptcy law nor does the Company have any knowledge or reason
to believe that its creditors intend to initiate involuntary bankruptcy
proceedings or any actual knowledge of any fact which would reasonably lead a
creditor to do so. The Company is not as of the date hereof, and after giving
effect to the transactions contemplated hereby to occur at the Closing, will not
be Insolvent (as defined below). For purposes of this Section 3(l), “Insolvent”
means, with respect to any Person (as defined in Section 3(s), (i) the present
fair saleable value of such Person’s assets is less than the amount required to
pay such Person’s total Indebtedness (as defined in Section 3(s)), (ii) such
Person is unable to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured, (iii) the
Company intends to incur or believes that it will incur debts that would be
beyond its ability to pay as such debts mature or (iv) such Person has
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted.

               (m)           No Undisclosed Events, Liabilities, Developments or
Circumstances. No event, liability, development or circumstance has occurred or
exists, or is contemplated to occur with respect to the Company, its
Subsidiaries or their respective business, properties, prospects, operations or
financial condition, that would be required to be disclosed by the Company under
applicable securities laws on a registration statement on Form S-1 filed with
the SEC relating to an issuance and sale by the Company of its Common Stock and
which has not been publicly announced.

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               (n)           Conduct of Business; Regulatory Permits. Neither
the Company nor its Subsidiaries is in violation of any term of or in default
under any certificate of designations of any outstanding series of preferred
stock of the Company, its Articles of Incorporation or Bylaws or their
organizational charter or certificate of incorporation or bylaws, respectively.
Neither the Company nor any of its Subsidiaries is in violation of any judgment,
decree or order or any statute, ordinance, rule or regulation applicable to the
Company or its Subsidiaries, and neither the Company nor any of its Subsidiaries
will conduct its business in violation of any of the foregoing, except for
possible violations which would not, individually or in the aggregate, have a
Material Adverse Effect. Without limiting the generality of the foregoing, the
Company is not in violation of any of the rules, regulations or requirements of
the Principal Market and has no knowledge of any facts or circumstances which
would reasonably lead to delisting or suspension of the Common Stock by the
Principal Market in the foreseeable future. During the two years prior to the
date hereof, the Common Stock has been designated for quotation on the Principal
Market. During the two years prior to the date hereof, (i) trading in the Common
Stock has not been suspended by the SEC or the Principal Market and (ii) the
Company has received no communication, written or oral, from the SEC or the
Principal Market regarding the suspension or delisting of the Common Stock from
the Principal Market. The Company and its Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate regulatory authorities
necessary to conduct their respective businesses, except where the failure to
possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Material Adverse Effect, and neither the
Company nor any such Subsidiary has received any notice of proceedings relating
to the revocation or modification of any such certificate, authorization or
permit.

               (o)           Foreign Corrupt Practices. Neither the Company, nor
any of its Subsidiaries, nor any director, officer, agent, employee or other
Person acting on behalf of the Company or any of its Subsidiaries has, in the
course of its actions for, or on behalf of, the Company or any of its
Subsidiaries (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity; (ii)
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.

               (p)           Sarbanes-Oxley Act. The Company is in compliance
with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that
are effective as of the date hereof, and any and all applicable rules and
regulations promulgated by the SEC thereunder that are effective as of the date
hereof.

               (q)           Transactions With Affiliates. Except as set on
Schedule 3(q), none of the officers, directors or employees of the Company is
presently a party to any transaction with the Company or any of its Subsidiaries
(other than for ordinary course services as employees, officers or directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
officer, director or employee or, to the knowledge of the Company or any of its
Subsidiaries, any corporation, partnership, trust or other entity in which any
such officer, director, or employee has a substantial interest or is an officer,
director, trustee or partner.

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               (r)           Equity Capitalization. As of the date hereof, the
authorized capital stock of the Company consists of (i) 200,000,000 shares of
Common Stock, of which as of the date hereof, 44,373,813 are issued and
outstanding, 8,200,000 shares are reserved for issuance pursuant to the
Company’s stock option and purchase plans and 12,245,452 shares are reserved for
issuance pursuant to securities (other than the aforementioned options, the
Notes and the Warrants) exercisable or exchangeable for, or convertible into,
shares of Common Stock and (ii) 20,000,000shares of preferred stock, par value
$0.001 per share, of which as of the date hereof, none are issued and
outstanding. All of such outstanding shares have been, or upon issuance will be,
validly issued and are fully paid and nonassessable. Except as disclosed in
Schedule 3(r): (i) none of the Company’s capital stock is subject to preemptive
rights or any other similar rights or any liens or encumbrances suffered or
permitted by the Company; (ii) there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any capital stock of the Company or any of its Subsidiaries,
or contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to issue additional capital
stock of the Company or any of its Subsidiaries or options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any capital stock of the Company or any of its Subsidiaries;
(iii) there are no outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing Indebtedness
of the Company or any of its Subsidiaries or by which the Company or any of its
Subsidiaries is or may become bound; (iv) there are no financing statements
securing obligations in any material amounts, either singly or in the aggregate,
filed in connection with the Company or any of its Subsidiaries; (v) there are
no agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of their securities under the 1933 Act
(except pursuant to the Registration Rights Agreement); (vi) there are no
outstanding securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries; (vii) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities; (viii) the Company does not have any stock appreciation rights
or “phantom stock” plans or agreements or any similar plan or agreement; and
(ix) the Company and its Subsidiaries have no liabilities or obligations
required to be disclosed in the SEC Documents but not so disclosed in the SEC
Documents, other than those incurred in the ordinary course of the Company’s or
its Subsidiaries’ respective businesses and which, individually or in the
aggregate, do not or would not have a Material Adverse Effect. The Company has
furnished to the Buyers true, correct and complete copies of the Company’s
Articles of Incorporation, as amended and as in effect on the date hereof (the
“Articles of Incorporation”), and the Company’s Bylaws, as amended and as in
effect on the date hereof (the “Bylaws”), and the terms of all securities
convertible into, or exercisable or exchangeable for, shares of Common Stock and
the material rights of the holders thereof in respect thereto.

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               (s)           Indebtedness and Other Contracts. Except as
disclosed in Schedule 3(s), neither the Company nor any of its Subsidiaries (i)
has any outstanding Indebtedness (as defined below), (ii) is a party to any
contract, agreement or instrument, the violation of which, or default under
which, by the other party(ies) to such contract, agreement or instrument would
result in a Material Adverse Effect, (iii) is in violation of any term of or in
default under any contract, agreement or instrument relating to any
Indebtedness, except where such violations and defaults would not result,
individually or in the aggregate, in a Material Adverse Effect, or (iv) is a
party to any contract, agreement or instrument relating to any Indebtedness, the
performance of which, in the judgment of the Company’s officers, has or is
expected to have a Material Adverse Effect. Schedule 3(s) provides a detailed
description of the material terms of any such outstanding Indebtedness. For
purposes of this Agreement: (x) “Indebtedness” of any Person means, without
duplication (A) all indebtedness for borrowed money, (B) all obligations issued,
undertaken or assumed as the deferred purchase price of property or services,
including (without limitation) “capital leases” in accordance with generally
accepted accounting principles (other than trade payables entered into in the
ordinary course of business), (C) all reimbursement or payment obligations with
respect to letters of credit, surety bonds and other similar instruments, (D)
all obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (F) all monetary obligations under any
leasing or similar arrangement which, in connection with generally accepted
accounting principles, consistently applied for the periods covered thereby, is
classified as a capital lease, (G) all indebtedness referred to in clauses (A)
through (F) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any mortgage,
lien, pledge, charge, security interest or other encumbrance upon or in any
property or assets (including accounts and contract rights) owned by any Person,
even though the Person which owns such assets or property has not assumed or
become liable for the payment of such indebtedness, and (H) all Contingent
Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (A) through (G) above; (y) “Contingent Obligation” means,
as to any Person, any direct or indirect liability, contingent or otherwise, of
that Person with respect to any indebtedness, lease, dividend or other
obligation of another Person if the primary purpose or intent of the Person
incurring such liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss
with respect thereto; and (z) “Person” means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.

               (t)           Absence of Litigation. There is no action, suit,
proceeding, inquiry or investigation before or by the Principal Market, any
court, public board, government agency, self-regulatory organization or body
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries, the Common Stock or any of the Company’s
Subsidiaries or any of the Company’s or its Subsidiaries’ officers or directors
in their capacities as such, except as set forth in Schedule 3(t).

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               (u)           Insurance. The Company and each of its Subsidiaries
are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been
refused any insurance coverage sought or applied for and neither the Company nor
any such Subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.

               (v)           Employee Relations. (i) Neither the Company nor any
of its Subsidiaries is a party to any collective bargaining agreement or employs
any member of a union. The Company and its Subsidiaries believe that their
relations with their employees are good. No executive officer of the Company or
any of its Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified
the Company or any such Subsidiary that such officer intends to leave the
Company or any such Subsidiary or otherwise terminate such officer’s employment
with the Company or any such Subsidiary. No executive officer of the Company or
any of its Subsidiaries, to the knowledge of the Company, is, or is now expected
to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability with respect to
any of the foregoing matters.

                          (ii)            The Company and its Subsidiaries are
in compliance with all federal, state, local and foreign laws and regulations
respecting labor, employment and employment practices and benefits, terms and
conditions of employment and wages and hours, except where failure to be in
compliance would not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

               (w)           Title. The Company and its Subsidiaries have good
and marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Company and its Subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be made of
such property by the Company and any of its Subsidiaries. Any real property and
facilities held under lease by the Company and any of its Subsidiaries are held
by them under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its Subsidiaries.

               (x)           Intellectual Property Rights. The Company and its
Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and other intellectual property rights
(“Intellectual Property Rights”) necessary to conduct their respective
businesses as now conducted. Except as set forth in Schedule 3(x), none of the
Company’s Intellectual Property Rights have expired or terminated, or are
expected to expire or terminate, within three years from the date of this
Agreement. The Company does not have any knowledge of any infringement by the
Company or its Subsidiaries of Intellectual Property Rights of others. There is
no claim, action or proceeding being made or brought, or to the knowledge of the
Company or its Subsidiaries, being threatened, against the Company or its
Subsidiaries regarding its Intellectual Property Rights. The Company is unaware
of any facts or circumstances which might give rise to any of the foregoing
infringements or claims, actions or proceedings. The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties.

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               (y)           Environmental Laws. The Company and its
Subsidiaries (i) are in compliance with any and all Environmental Laws (as
hereinafter defined), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval where, in each of the foregoing clauses
(i), (ii) and (iii), the failure to so comply could be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect. The term
“Environmental Laws” means all federal, state, local or foreign laws relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants, or toxic
or hazardous substances or wastes (collectively, “Hazardous Materials”)into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.

               (z)           Subsidiary Rights. Except as set forth in Schedule
3(z), the Company or one of its Subsidiaries has the unrestricted right to vote,
and (subject to limitations imposed by applicable law) to receive dividends and
distributions on, all capital securities of its Subsidiaries as owned by the
Company or such Subsidiary.

               (aa)           Investment Company Status. The Company is not, and
upon consummation of the sale of the Securities will not be, an “investment
company,” a company controlled by an “investment company” or an “affiliated
person” of, or “promoter” or “principal underwriter” for, an “investment
company” as such terms are defined in the Investment Company Act of 1940, as
amended.

               (bb)           Tax Status. The Company and each of its
Subsidiaries (i) has made or filed all foreign, federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to
which it is subject, (ii) has paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and (iii) has set aside on its books provision reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company know of no basis for any such claim.

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               (cc)           Internal Accounting and Disclosure Controls. The
Company and each of its Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management’s
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken with respect to any
difference. The Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-14 under the 1934 Act) that are effective in
ensuring that information required to be disclosed by the Company in the reports
that it files or submits under the 1934 Act is recorded, processed, summarized
and reported, within the time periods specified in the rules and forms of the
SEC, including, without limitation, controls and procedures designed in to
ensure that information required to be disclosed by the Company in the reports
that it files or submits under the 1934 Act is accumulated and communicated to
the Company’s management, including its principal executive officer or officers
and its principal financial officer or officers, as appropriate, to allow timely
decisions regarding required disclosure. During the twelve months prior to the
date hereof neither the Company nor any of its Subsidiaries have received any
notice or correspondence from any accountant relating to any material weakness
in any part of the system of internal accounting controls of the Company or any
of its Subsidiaries

               (dd)           Off Balance Sheet Arrangements. There is no
transaction, arrangement, or other relationship between the Company and an
unconsolidated or other off balance sheet entity that is required to be
disclosed by the Company in its Exchange Act filings and is not so disclosed or
that otherwise would be reasonably likely to have a Material Adverse Effect.

               (ee)           Ranking of Notes. Except as set forth on Schedule
3(ee), no Indebtedness of the Company is senior to or ranks pari passu with the
Notes in right of payment, whether with respect of payment of redemptions,
interest, damages or upon liquidation or dissolution or otherwise.

               (ff)           Form S-1 Eligibility. The Company is eligible to
register the Conversion Shares, the Interest Shares and the Warrant Shares for
resale by the Buyers using Form S-1 promulgated under the 1933 Act.

               (gg)           Transfer Taxes. On the Closing Date, all stock
transfer or other taxes (other than income or similar taxes) which are required
to be paid in connection with the sale and transfer of the Securities to be sold
to each Buyer hereunder will be, or will have been, fully paid or provided for
by the Company, and all laws imposing such taxes will be or will have been
complied with.

               (hh)           Manipulation of Price. The Company has not, and to
its knowledge no one acting on its behalf has, (i) taken, directly or
indirectly, any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of any of the Securities, (ii) other than the Placement Agent, sold,
bid for, purchased, or paid any compensation for soliciting purchases of, any of
the Securities, or (iii) other than the Placement Agent, paid or agreed to pay
to any person any compensation for soliciting another to purchase any other
securities of the Company.

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               (ii)           Acknowledgement Regarding Buyers’ Trading
Activity. It is understood and acknowledged by the Company that, except as set
forth in Section 4(t), (i) none of the Buyers have been asked to agree, nor has
any Buyer agreed, to desist from purchasing or selling, long and/or short,
securities of the Company, or “derivative” securities based on securities issued
by the Company or to hold the Securities for any specified term; (ii) any Buyer,
and counter parties in “derivative” transactions to which any such Buyer is a
party, directly or indirectly, presently may have a “short” position in the
Common Stock, and (iii) each Buyer shall not be deemed to have any affiliation
with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that one or more
Buyers may engage in hedging and/or trading activities at various times during
the period that the Securities are outstanding, including, without limitation,
during the periods that the value of the Conversion Shares, the Warrant Shares,
and the Interest Shares are being determined and (b) such hedging and/or trading
activities, if any, can reduce the value of the existing stockholders’ equity
interest in the Company both at and after the time the hedging and/or trading
activities are being conducted. The Company acknowledges that such
aforementioned hedging and/or trading activities do not constitute a breach of
this Agreement, the Notes, the Warrants or any of the documents executed in
connection herewith.

               (jj)           U.S. Real Property Holding Corporation. The
Company is not, nor has ever been, a U.S. real property holding corporation
within the meaning of Section 897 of the Internal Revenue Code of 1986, as
amended, and the Company shall so certify upon Buyer’s request.

               (kk)           Bank Holding Company Act. Neither the Company nor
any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as
amended (the “BHCA”) and to regulation by the Board of Governors of the Federal
Reserve System (the “Federal Reserve”). Neither the Company nor any of its
Subsidiaries or affiliates owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities
or twenty-five (25%) or more of the total equity of a bank or any equity that is
subject to the BHCA and to regulation by the Federal Reserve. Neither the
Company nor any of its Subsidiaries or affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.

               (ll)           Disclosure. The Company confirms that neither it
nor any other Person acting on its behalf has provided any of the Buyers or
their agents or counsel with any information that constitutes or could
reasonably be expected to constitute material, nonpublic information. The
Company understands and confirms that each of the Buyers will rely on the
foregoing representations in effecting transactions in securities of the
Company. All disclosure provided to the Buyers regarding the Company, or any of
its Subsidiaries, their business and the transactions contemplated hereby,
including the Schedules to this Agreement, furnished by or on behalf of the
Company is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. Each press release issued by the Company or any of its
Subsidiaries during the twelve (12) months preceding the date of this Agreement
did not at the time of release contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. No event or circumstance has occurred or
information exists with respect to the Company or any of its Subsidiaries or its
or their business, properties, prospects, operations or financial conditions,
which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.

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    4.            COVENANTS.

               (a)           Best Efforts. Each party shall use its best efforts
timely to satisfy each of the conditions to be satisfied by it as provided in
Sections 6 and 7 of this Agreement.

               (b)           Form D and Blue Sky. The Company agrees to file a
Form D with respect to the Securities as required under Regulation D and to
provide a copy thereof to each Buyer promptly after such filing. The Company
shall, on or before the Closing Date, take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for or to
qualify the Securities for sale to the Buyers at the Closing pursuant to this
Agreement under applicable securities or “Blue Sky” laws of the states of the
United States (or to obtain an exemption from such qualification), and shall
provide evidence of any such action so taken to the Buyers on or prior to the
Closing Date. The Company shall make all filings and reports relating to the
offer and sale of the Securities required under applicable securities or “Blue
Sky” laws of the states of the United States following the Closing Date.

               (c)           Reporting Status. Until the date on which the
Investors (as defined in the Registration Rights Agreement) shall have sold all
the Conversion Shares, the Interest Shares and the Warrant Sharesand none of the
Notes orthe Warrants is outstanding (the “Reporting Period”), the Company shall
timely file all reports required to be filed with the SEC pursuant to the 1934
Act, and the Company shall not terminate its status as an issuer required to
file reports under the 1934 Act even if the 1934 Act or the rules and
regulations thereunder would permit such termination.

               (d)           Use of Proceeds. The Company will use the proceeds
from the sale of the Securities for general corporate and for working capital
purposes and not for (i) the repayment of any outstanding Indebtedness of the
Company or any of its Subsidiaries, (ii) the redemption or repurchase of any of
its or its Subsidiaries’ equity securities or (iii) the settlement of any
claims, actions or proceedings against the Company or any of its Subsidiaries.

               (e)           Financial Information. The Company agrees to send
the following to each Investor (as defined in the Registration Rights Agreement)
during the Reporting Period (i) unless the following are filed with the SEC
through EDGAR and are available to the public through the EDGAR system, within
one (1) Business Day after the filing thereof with the SEC, a copy of its Annual
Reports and Quarterly Reports on Form 10-K, 10-KSB, 10-Q or 10-QSB, any interim
reports or any consolidated balance sheets, income statements, stockholders’
equity statements and/or cash flow statements for any period other than annual,
any Current Reports on Form 8-K and any registration statements (other than on
Form S-8) or amendments filed pursuant to the 1933 Act, (ii) on the same day as
the release thereof, facsimile or e-mailed copies of all press releases issued
by the Company or any of its Subsidiaries, and (iii) copies of any notices and
other information made available or given to the stockholders of the Company
generally, contemporaneously with the making available or giving thereof to the
stockholders. As used herein, “Business Day” means any day other than Saturday,
Sunday or other day on which commercial banks in The City of New York are
authorized or required by law to remain closed.

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               (f)           Listing. The Company shall promptly secure the
listing of all of the Registrable Securities (as defined in the Registration
Rights Agreement) upon each national securities exchange and automated quotation
system, if any, upon which the Common Stock is then listed (subject to official
notice of issuance) and shall maintain such listing of all Registrable
Securities from time to time issuable under the terms of the Transaction
Documents. The Company shall maintain the Common Stocks’ authorization for
quotation on the Principal Market. Neither the Company nor any of its
Subsidiaries shall take any action which would be reasonably expected to result
in the delisting or suspension of the Common Stock on the Principal Market. The
Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 4(f).

               (g)           Fees. The Company shall reimburse Castlerigg (a
Buyer) or its designee(s) (in addition to any other expense amounts paid to any
Buyer prior to the date of this Agreement) for all reasonable costs and expenses
incurred in connection with the transactions contemplated by the Transaction
Documents (including all reasonable legal fees and disbursements in connection
therewith, documentation and implementation of the transactions contemplated by
the Transaction Documents and due diligence in connection therewith), which
amount shall be withheld by such Buyer from its Net Purchase Price at the
Closing. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or broker’s commissions (other than for
Persons engaged by any Buyer) relating to or arising out of the transactions
contemplated hereby, including, without limitation, any fees or commissions
payable to the Placement Agent. The Company shall pay, and hold each Buyer
harmless against, any liability, loss or expense (including, without limitation,
reasonable attorney’s fees and out-of-pocket expenses) arising in connection
with any claim relating to any such payment. Except as otherwise set forth in
the Transaction Documents, each party to this Agreement shall bear its own
expenses in connection with the sale of the Securities to the Buyers.

               (h)           Pledge of Securities. The Company acknowledges and
agrees that the Securities may be pledged by an Investor (as defined in the
Registration Rights Agreement) in connection with a bona fide margin agreement
or other loan or financing arrangement that is secured by the Securities. The
pledge of Securities shall not be deemed to be a transfer, sale or assignment of
the Securities hereunder, and no Investor effecting a pledge of Securities shall
be required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement or any other Transaction
Document, including, without limitation, Section 2(f) hereof; provided that an
Investor and its pledgee shall be required to comply with the provisions of
Section 2(f) hereof in order to effect a sale, transfer or assignment of
Securities to such pledgee. The Company hereby agrees to execute and deliver
such documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by an Investor.

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               (i)           Disclosure of Transactions and Other Material
Information. On or before 8:30 a.m., New York City time, on the first Business
Day following the date of this Agreement, the Company shall issue a press
release and file a Current Report on Form 8-K describing the terms of the
transactions contemplated by the Transaction Documents in the form required by
the 1934 Act and attaching the material Transaction Documents (including,
without limitation, this Agreement, the form of the Notes, the form of Warrant,
the form the Registration Rights Agreement and the form of Security Documents as
exhibits to such filing (including all attachments, the “8-K Filing”). From and
after the filing of the 8-K Filing with the SEC, no Buyer shall be in possession
of any material, nonpublic information received from the Company, any of its
Subsidiaries or any of their respective officers, directors, employees or
agents, that is not disclosed in the 8-K Filing. The Company shall not, and
shall cause each of its Subsidiaries and its and each of their respective
officers, directors, employees and agents, not to, provide any Buyer with any
material, nonpublic information regarding the Company or any of its Subsidiaries
from and after the filing of the 8-K Filing with the SEC without the express
written consent of such Buyer. If a Buyer has, or believes it has, received any
such material, nonpublic information regarding the Company or any of its
Subsidiaries, it shall provide the Company with written notice thereof. The
Company shall, within two (2) Trading Days (as defined in the Notes) of receipt
of such notice, make public disclosure of such material, nonpublic information.
In the event of a breach of the foregoing covenant by the Company, any of its
Subsidiaries, or any of its or their respective officers, directors, employees
and agents, in addition to any other remedy provided herein or in the
Transaction Documents, a Buyer shall have the right to make a public disclosure,
in the form of a press release, public advertisement or otherwise, of such
material, nonpublic information without the prior approval by the Company, its
Subsidiaries, or any of its or their respective officers, directors, employees
or agents. No Buyer shall have any liability to the Company, its Subsidiaries,
or any of its or their respective officers, directors, employees, stockholders
or agents for any such disclosure. Subject to the foregoing, neither the
Company, its Subsidiaries nor any Buyer shall issue any press releases or any
other public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior
approval of any Buyer, to make any press release or other public disclosure with
respect to such transactions (i) in substantial conformity with the 8-K Filing
and contemporaneously therewith and (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) each Buyer shall be
consulted by the Company in connection with any such press release or other
public disclosure prior to its release). Without the prior written consent of
any applicable Buyer, neither the Company nor any of its Subsidiaries or
affiliates shall disclose the name of such Buyer in any filing, announcement,
release or otherwise.

               (j)           Restriction on Redemption and Cash Dividends. So
long as any Notes are outstanding, the Company shall not, directly or
indirectly, redeem, or declare or pay any cash dividend or distribution on, the
Common Stock without the prior express written consent of the holders of Notes
representing not less than a majority of the aggregate principal amount of the
then outstanding Notes.

               (k)           Additional Notes; Variable Securities; Dilutive
Issuances. So long as any Buyer beneficially owns any Securities, the Company
will not issue any Notes other than to the Buyers as contemplated hereby and the
Company shall not issue any other securities that would cause a breach or
default under the Notes. For so long as any Notes or Warrants remain
outstanding, the Company shall not, in any manner, issue or sell any rights,
warrants or options to subscribe for or purchase Common Stock or directly or
indirectly convertible into or exchangeable or exercisable for Common Stock at a
price which varies or may vary with the market price of the Common Stock,
including by way of one or more reset(s) to any fixed price unless the
conversion, exchange or exercise price of any such security cannot be less than
the then applicable Conversion Price (as defined in the Notes) with respect to
the Common Stock into which any Note is convertible or the then applicable
Exercise Price (as defined in the Warrants) with respect to the Common Stock
into which any Warrant is exercisable. For so long as any Notes or Warrants
remain outstanding, the Company shall not, in any manner, enter into or affect
any Dilutive Issuance (as defined in the Notes) if the effect of such Dilutive
Issuance is to cause the Company to be required to issue upon conversion of any
Note or exercise of any Warrant any shares of Common Stock in excess of that
number of shares of Common Stock which the Company may issue upon conversion of
the Notes and exercise of the Warrants without breaching the Company’s
obligations under the rules or regulations of the Principal Market or any
applicable Eligible Market (as defined in the Registration Rights Agreement).

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               (l)       Corporate Existence. So long as any Buyer beneficially
owns any Securities, the Company shall not be party to any Fundamental
Transaction (as defined in the Notes) unless the Company is in compliance with
the applicable provisions governing Fundamental Transactions set forth in the
Notes and the Warrants.

               (m)       Reservation of Shares. So long as any Buyer owns any
Securities, the Company shall take all action necessary to at all times have
authorized, and reserved for the purpose of issuance, no less than 130% of the
sum of the number of shares of Common Stock issuable (i) as Interest Shares
pursuant to the terms of the Notes, (ii) upon conversion of the Notes and (ii)
upon exercise of the Warrants then outstanding (without taking into account any
limitations on the conversion of the Notes or exercise of the Warrants set forth
in the Notes and Warrants, respectively).

               (n)       Conduct of Business. The business of the Company and
its Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any governmental entity, except where such violations would not
result, either individually or in the aggregate, in a Material Adverse Effect.

               (o)       Additional Issuances of Securities.

                          (i)       For purposes of this Section 4(o), the
following definitions shall apply.

                                     (1)       “Convertible Securities” means
any stock or securities (other than Options) convertible into or exercisable or
exchangeable for shares of Common Stock.

                                     (2)       “Options” means any rights,
warrants or options to subscribe for or purchase shares of Common Stock or
Convertible Securities.

                                     (3)       “Common Stock Equivalents” means,
collectively, Options and Convertible Securities.

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                          (ii)       From the date hereof until the date when
all Registrable Securities (as defined in the Registration Rights Agreement) are
freely tradable without the requirement to be in compliance with Rule 144(c)(1)
and otherwise without restriction or limitation pursuant to Rule 144 (the
“Trigger Date”), the Company will not, directly or indirectly, file any
registration statement with the SEC other than the Registration Statement (as
defined in the Registration Rights Agreement). From the date hereof until the
Trigger Date, the Company will not, (i) directly or indirectly, offer, sell,
grant any option to purchase, or otherwise dispose of (or announce any offer,
sale, grant or any option to purchase or other disposition of) any of its or its
Subsidiaries’ equity or equity equivalent securities, including without
limitation any debt, preferred stock or other instrument or security that is, at
any time during its life and under any circumstances, convertible into or
exchangeable or exercisable for shares of Common Stock or Common Stock
Equivalents (any such offer, sale, grant, disposition or announcement being
referred to as a “Subsequent Placement”) or (ii) be party to any solicitations,
negotiations or discussions with regard to the foregoing.

                          (iii)       From the Trigger Date until the third
anniversary of the earlier of (i) the date when all Registrable Securities (as
defined in the Registration Rights Agreement) have been registered or (ii) the
date when all Registrable Securities are freely tradable without the requirement
to be in compliance with Rule 144(c)(1) and otherwise without restriction or
limitation pursuant to Rule 144, the Company will not, directly or indirectly,
effect any Subsequent Placement unless the Company shall have first complied
with this Section 4(o)(iii).

                          (1)              The Company shall deliver to each
Buyer an irrevocable written notice (the “Offer Notice”) of any proposed or
intended issuance or sale or exchange (the “Offer”) of the securities being
offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice
shall (w) identify and describe the Offered Securities, (x) describe the price
and other terms upon which they are to be issued, sold or exchanged, and the
number or amount of the Offered Securities to be issued, sold or exchanged,
(y) identify the persons or entities (if known) to which or with which the
Offered Securities are to be offered, issued, sold or exchanged and (z) offer to
issue and sell to or exchange with such Buyers all of the Offered Securities,
allocated among such Buyers (a) based on such Buyer’s pro rata portion of the
aggregate principal amount of Notes purchased hereunder (the “Basic Amount”),
and (b) with respect to each Buyer that elects to purchase its Basic Amount, any
additional portion of the Offered Securities attributable to the Basic Amounts
of other Buyers as such Buyer shall indicate it will purchase or acquire should
the other Buyers subscribe for less than their Basic Amounts (the
“Undersubscription Amount”), which process shall be repeated until the Buyers
shall have an opportunity to subscribe for any remaining Undersubscription
Amount.

                          (2)       To accept an Offer, in whole or in part,
such Buyer must deliver a written notice to the Company prior to the end of the
tenth (10th) Business Day after such Buyer’s receipt of the Offer Notice (the
“Offer Period”), setting forth the portion of such Buyer’s Basic Amount that
such Buyer elects to purchase and, if such Buyer shall elect to purchase all of
its Basic Amount, the Undersubscription Amount, if any, that such Buyer elects
to purchase (in either case, the “Notice of Acceptance”). If the Basic Amounts
subscribed for by all Buyers are less than the total of all of the Basic
Amounts, then each Buyer who has set forth an Undersubscription Amount in its
Notice of Acceptance shall be entitled to purchase, in addition to the Basic
Amounts subscribed for, the Undersubscription Amount it has subscribed for;
provided, however, that if the Undersubscription Amounts subscribed for exceed
the difference between the total of all the Basic Amounts and the Basic Amounts
subscribed for (the “Available Undersubscription Amount”), each Buyer who has
subscribed for any Undersubscription Amount shall be entitled to purchase only
that portion of the Available Undersubscription Amount as the Basic Amount of
such Buyer bears to the total Basic Amounts of all Buyers that have subscribed
for Undersubscription Amounts, subject to rounding by the Company to the extent
its deems reasonably necessary. Notwithstanding anything to the contrary
contained herein, if the Company desires to modify or amend the terms and
conditions of the Offer prior to the expiration of the Offer Period, the Company
may deliver to the Buyers a new Offer Notice and the Offer Period shall expire
on the tenth (10th) Business Day after such Buyer’s receipt of such new Offer
Notice.

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                          (3)       The Company shall have five (5) Business
Days from the expiration of the Offer Period above to offer, issue, sell or
exchange all or any part of such Offered Securities as to which a Notice of
Acceptance has not been given by the Buyers (the “Refused Securities”), but only
to the offerees described in the Offer Notice (if so described therein) and only
upon terms and conditions (including, without limitation, unit prices and
interest rates) that are not more favorable to the acquiring person or persons
or less favorable to the Company than those set forth in the Offer Notice and
(ii) to publicly announce (a) the execution of such Subsequent Placement
Agreement, and (b) either (x) the consummation of the transactions contemplated
by such Subsequent Placement Agreement or (y) the termination of such Subsequent
Placement Agreement, which shall be filed with the SEC on a Current Report on
Form 8-K with such Subsequent Placement Agreement and any documents contemplated
therein filed as exhibits thereto.

                          (4)       In the event the Company shall propose to
sell less than all the Refused Securities (any such sale to be in the manner and
on the terms specified in Section 4(o)(iii)(3) above), then each Buyer may, at
its sole option and in its sole discretion, reduce the number or amount of the
Offered Securities specified in its Notice of Acceptance to an amount that shall
be not less than the number or amount of the Offered Securities that such Buyer
elected to purchase pursuant to Section 4(o)(iii)(2) above multiplied by a
fraction, (i) the numerator of which shall be the number or amount of Offered
Securities the Company actually proposes to issue, sell or exchange (including
Offered Securities to be issued or sold to Buyers pursuant to Section
4(o)(iii)(3) above prior to such reduction) and (ii) the denominator of which
shall be the original amount of the Offered Securities. In the event that any
Buyer so elects to reduce the number or amount of Offered Securities specified
in its Notice of Acceptance, the Company may not issue, sell or exchange more
than the reduced number or amount of the Offered Securities unless and until
such securities have again been offered to the Buyers in accordance with
Section 4(o)(iii)(1) above.

                          (5)       Upon the closing of the issuance, sale or
exchange of all or less than all of the Refused Securities, the Buyers shall
acquire from the Company, and the Company shall issue to the Buyers, the number
or amount of Offered Securities specified in the Notices of Acceptance, as
reduced pursuant to Section 4(o)(iii)(3) above if the Buyers have so elected,
upon the terms and conditions specified in the Offer. The purchase by the Buyers
of any Offered Securities is subject in all cases to the preparation, execution
and delivery by the Company and the Buyers of a purchase agreement relating to
such Offered Securities reasonably satisfactory in form and substance to the
Buyers and their respective counsel.

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                          (6)       Any Offered Securities not acquired by the
Buyers or other persons in accordance with Section 4(o)(iii)(3) above may not be
issued, sold or exchanged until they are again offered to the Buyers under the
procedures specified in this Agreement.

                          (7)       The Company and the Buyers agree that if any
Buyer elects to participate in the Offer, (x) neither the agreement regarding
the Subsequent Placement (the “Subsequent Placement Agreement”) with respect to
such Offer nor any other transaction documents related thereto (collectively,
the “Subsequent Placement Documents”) shall include any term or provisions
whereby any Buyer shall be required to agree to any restrictions in trading as
to any securities of the Company owned by such Buyer prior to such Subsequent
Placement, and (y) any registration rights set forth in such Subsequent
Placement Documents shall be similar in all material respects to the
registration rights contained in the Registration Rights Agreement.

                          (8)       Notwithstanding anything to the contrary in
this Section 4(o) and unless otherwise agreed to by the Buyers, the Company
shall either confirm in writing to the Buyers that the transaction with respect
to the Subsequent Placement has been abandoned or shall publicly disclose its
intention to issue the Offered Securities, in either case in such a manner such
that the Buyers will not be in possession of material non-public information, by
the fifteenth (15th) Business Day following delivery of the Offer Notice. If by
the fifteenth (15th) Business Day following delivery of the Offer Notice no
public disclosure regarding a transaction with respect to the Offered Securities
has been made, and no notice regarding the abandonment of such transaction has
been received by the Buyers, such transaction shall be deemed to have been
abandoned and the Buyers shall not be deemed to be in possession of any
material, non-public information with respect to the Company. Should the Company
decide to pursue such transaction with respect to the Offered Securities, the
Company shall provide each Buyer with another Offer Notice and each Buyer will
again have the right of participation set forth in this Section 4(o)(iii). The
Company shall not be permitted to deliver more than one such Offer Notice to the
Buyers in any 60 day period.

                          (iv)       The restrictions contained in subsections
(ii) and (iii) of this Section 4(o) shall not apply in connection with the
issuance of any Excluded Securities (as defined in the Notes).

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               (p)            Each Buyer hereby (a) appoints Castlerigg, as the
collateral agent hereunder and under the other Security Documents (in such
capacity, the “Collateral Agent”), and (b) authorizes the Collateral Agent (and
its officers, directors, employees and agents) to take such action on such
Buyer’s behalf in accordance with the terms hereof and thereof. The Collateral
Agent shall not have, by reason hereof or any of the other Security Documents, a
fiduciary relationship in respect of any Buyer. Neither the Collateral Agent nor
any of its officers, directors, employees and agents shall have any liability to
any Buyer for any action taken or omitted to be taken in connection hereof or
any other Security Document except to the extent caused by its own gross
negligence or willful misconduct, and each Buyer agrees to defend, protect,
indemnify and hold harmless the Collateral Agent and all of its officers,
directors, employees and agents (collectively, the “Indemnitees”) from and
against any losses, damages, liabilities, obligations, penalties, actions,
judgments, suits, fees, costs and expenses (including, without limitation,
reasonable attorneys’ fees, costs and expenses) incurred by such Indemnitee,
whether direct, indirect or consequential, arising from or in connection with
the performance by such Indemnitee of the duties and obligations of Collateral
Agent pursuant hereto or any of the Security Documents. The Collateral Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the holders of at
least a majority in principal amount of the Notes then outstanding, and such
instructions shall be binding upon all holders of Notes; provided, however, that
the Collateral Agent shall not be required to take any action which, in the
reasonable opinion of the Agent, exposes the Agent to liability or which is
contrary to this Agreement or any other Transaction Document or applicable law.

                          (i)            The Collateral Agent shall be entitled
to rely upon any written notices, statements, certificates, orders or other
documents or any telephone message believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper Person, and with
respect to all matters pertaining to this Agreement or any of the other
Transaction Documents and its duties hereunder or thereunder, upon advice of
counsel selected by it.

                          (ii)            The Collateral Agent may resign from
the performance of all its functions and duties hereunder and under the Notes
and the Security Documents at any time by giving at least ten (10) Business Days
prior written notice to the Company and each holder of the Notes. Such
resignation shall take effect upon the acceptance by a successor Collateral
Agent of appointment as provided below. Upon any such notice of resignation, the
holders of a majority of the outstanding principal under the Notes shall appoint
a successor Collateral Agent. Upon the acceptance of the appointment as
Collateral Agent, such successor Collateral Agent shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall be discharged from its
duties and obligations under this Agreement, the Notes and the other Security
Documents. After any Collateral Agent’s resignation hereunder , the provisions
of this Section 4(p) shall inure to its benefit. If a successor Collateral Agent
shall not have been so appointed within said ten (10) Business Day period, the
retiring Collateral Agent shall then appoint a successor Collateral Agent who
shall serve until such time, if any, as the holders of a majority of the
outstanding principal under the Notes appoint a successor Collateral Agent as
provided above.

               (q)           No Waiver of Lock-Up Agreements. The Company shall
not amend, waive or modify any provision of any of the Lock-Up Agreements (as
defined below).

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               (r)           Public Information. At any time during the period
commencing on the six (6) month anniversary of the Closing Date and ending at
such time that all of the Securities can be sold without the requirement to be
in compliance with Rule 144(c)(1) and otherwise without restriction or
limitation pursuant to Rule 144, if a registration statement is not available
for the resale of all of the Securities and the Company shall fail for any
reason to satisfy the current public information requirement under Rule 144 (a
“Public Information Failure”) then, as partial relief for the damages to any
holder of Securities by reason of any such delay in or reduction of its ability
to sell the Securities (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each such
holder an amount in cash equal to two percent (2.0%) of the aggregate Purchase
Price of such holder’s Securities on the day of a Public Information Failure and
on every thirtieth day (pro rated for periods totaling less than thirty days)
thereafter until the earlier of (i) the date such Public Information Failure is
cured and (ii) such time that such public information is no longer required
pursuant to Rule 144. The payments to which a holder shall be entitled pursuant
to this Section 4(p) are referred to herein as “Public Information Failure
Payments.” Public Information Failure Payments shall be paid on the earlier of
(I) the last day of the calendar month during which such Public Information
Failure Payments are incurred and (II) the third Business Day after the event or
failure giving rise to the Public Information Failure Payments is cured. In the
event the Company fails to make Public Information Failure Payments in a timely
manner, such Public Information Failure Payments shall bear interest at the rate
of 1.5% per month (prorated for partial months) until paid in full.

               (s)           Trading in Common Stock. For the period commencing
on the date hereof and ending on the earlier to occur of (i) the six month
anniversary of the Closing Date and (ii) the Effective Date (as defined in the
Registration Rights Agreement), each Buyer, severally and not jointly with the
other Buyers, covenants that neither it nor any affiliate acting on its behalf
or pursuant to any understanding with it will engage in hedging activities with
respect to the Common Stock, including “short sales” as defined in Rule 200 of
Regulation SHO under the 1934 Act. With respect to any Buyer, for so long as
such Buyer owns any Notes, such Buyer shall not maintain a Net Short Position.
For purposes of this Section, a “Net Short Position” by a Buyer means a position
whereby such Buyer has executed one or more sales of Common Stock that is marked
as a short sale and that is executed at a time when such Buyer has no equivalent
offsetting long position in the Common Stock or contract for the foregoing. For
purposes of determining whether a Buyer has an equivalent offsetting long
position in the Common Stock, all Common Stock (i) that is owned by such Buyer
or (ii) that would be issuable upon conversion or exercise in full of all
Securities then held by such Buyer (assuming that such Securities were then
fully convertible or exercisable, notwithstanding any provisions to the
contrary, and giving effect to any conversion or exercise price adjustments that
would take effect given only the passage of time) shall be deemed to be held
long by such Buyer.

               (t)           Additional Relief. If the Company shall fail for
any reason or for no reason to issue to the Buyer unlegended certificates or
issue Common Stock to such Buyer by electronic delivery at the applicable
balance account at DTC within three (3) Trading Days after the receipt of
documents necessary for the removal of the legend set forth in Section 2(g)
above (the “Removal Date”), then in addition to all other remedies available to
the Buyer, if on or after the Trading Day immediately following such three
Trading Day period, the Buyer purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Buyer of such Common Stock that the Buyer anticipated receiving without legend
from the Company (a “Buy-In”), then the Company shall, within three (3) Business
Days after the Buyer’s request and in the Buyer’s discretion, either (i) pay
cash to the Buyer in an amount equal to the Buyer’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased (the “Buy-In Price”), at which point the Company’s obligation to
deliver such unlegended Common Stock shall terminate, or (ii) promptly honor its
obligation to deliver to the Buyer such unlegended Common Stock as provided
above and pay cash to the Buyer in an amount equal to the excess (if any) of the
Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the Closing Bid Price (as defined in the Warrants) on the Removal
Date.

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               (u)           Closing Documents. On or prior to fourteen (14)
calendar days after the Closing Date, the Company agrees to deliver, or cause to
be delivered, to each Buyer and Schulte Roth & Zabel LLP executed copies of the
Transaction Documents, Securities and other document required to be delivered to
any party pursuant to Section 7 hereof.

    5.            REGISTER; TRANSFER AGENT INSTRUCTIONS.

               (a)           Register. The Company shall maintain at its
principal executive offices (or such other office or agency of the Company as it
may designate by notice to each holder of Securities), a register for the Notes
and the Warrants in which the Company shall record the name and address of the
Person in whose name the Notes andthe Warrants have been issued (including the
name and address of each transferee), the principal amount of Notes held by such
Person, the number of Conversion Shares issuable upon conversion of the Notes
and the number of Warrant Shares issuable upon exercise of the Warrants held by
such Person. The Company shall keep the register open and available at all times
during business hours for inspection of any Buyer or its legal representatives.

               (b)           Transfer Agent Instructions. The Company shall
issue irrevocable instructions to its transfer agent, and any subsequent
transfer agent, to issue certificates or credit shares to the applicable balance
accounts at The Depository Trust Company (“DTC”), registered in the name of each
Buyer or its respective nominee(s), for the Conversion Shares, the Interest
Shares and the Warrant Shares issued at the Closing or upon conversion of the
Notes or exercise of the Warrants in such amounts as specified in such amounts
as specified from time to time by each Buyer to the Company upon conversion of
the Notes or exercise of the Warrants in the form of Exhibit G (the “Irrevocable
Transfer Agent Instructions”). The Company warrants that no instruction other
than the Irrevocable Transfer Agent Instructions referred to in this Section
5(b), and stop transfer instructions to give effect to Section 2(g) hereof, will
be given by the Company to its transfer agent, and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and
to the extent provided in this Agreement and the other Transaction Documents. If
a Buyer effects a sale, assignment or transfer of the Securities in accordance
with Section 2(f), the Company shall permit the transfer and shall promptly
instruct its transfer agent to issue one or more certificates or credit shares
to the applicable balance accounts at DTC in such name and in such denominations
as specified by such Buyer to effect such sale, transfer or assignment. In the
event that such sale, assignment or transfer involves Conversion Shares,
Interest Shares or Warrant Shares sold, assigned or transferred pursuant to an
effective registration statement or pursuant to Rule 144, the transfer agent
shall issue such Securities to the Buyer, assignee or transferee, as the case
may be, without any restrictive legend. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to a Buyer.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Section 5(b) will be inadequate and agrees, in the event
of a breach or threatened breach by the Company of the provisions of this
Section 5(b), that a Buyer shall be entitled, in addition to all other available
remedies, to an order and/or injunction restraining any breach and requiring
immediate issuance and transfer, without the necessity of showing economic loss
and without any bond or other security being required.

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    6.            CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

                   The obligation of the Company hereunder to issue and sell the
Notes and the related Warrants to each Buyer at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole discretion by providing
each Buyer with prior written notice thereof:

                          (i)            Such Buyer shall have executed each of
the Transaction Documents to which it is a party and delivered the same to the
Company.

                          (ii)            Such Buyer and each other Buyer shall
have delivered to the Company the Net Purchase Price (less, in the case of
Castlerigg, the amounts withheld pursuant to Section 4(g)) for the Notes and the
related Warrants being purchased by such Buyer at the Closing by wire transfer
of immediately available funds pursuant to the wire instructions provided by the
Company.

                          (iii)            The representations and warranties of
such Buyer shall be true and correct in all material respects as of the date
when made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date), and such Buyer
shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by such Buyer at or prior to the Closing Date.

    7.            CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.

                   The obligation of each Buyer hereunder to purchase the Notes
and the related Warrants at the Closing is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions, provided that
these conditions are for each Buyer’s sole benefit and may be waived by such
Buyer at any time in its sole discretion by providing the Company with prior
written notice thereof:

                          (i)            The Company shall have duly executed
and delivered to such Buyer (A) each of the Transaction Documents, (B) the Notes
(in such principal amounts as such Buyer shall request), being purchased by such
Buyer at the Closing pursuant to this Agreement, and (C) the related Warrants
(in such amounts as such Buyer shall request) being purchased by such Buyer at
the Closing pursuant to this Agreement.

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                          (ii)            Such Buyer shall have received the
opinion of Dennis Brovarone, the Company’s outside counsel, dated as of the
Closing Date, in substantially the form of Exhibit G attached hereto.

                          (iii)            The Company shall have delivered to
such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form of
Exhibit H attached hereto, which instructions shall have been delivered to and
acknowledged in writing by the Company’s transfer agent.

                          (iv)            The Company shall have delivered to
such Buyer a certificate evidencing the formation and good standing of the
Company and each of its Subsidiaries in such entity’s jurisdiction of formation
issued by the Secretary of State (or comparable office) of such jurisdiction, as
of a date within 10 days of the Closing Date.

                          (v)            The Company shall have delivered to
such Buyer a certificate evidencing the Company’s qualification as a foreign
corporation and good standing issued by the Secretary of State (or comparable
office) of each jurisdiction in which the Company conducts business, as of a
date within 10 days of the Closing Date.

                          (vi)            The Company shall have delivered to
such Buyer a certified copy of the Articles of Incorporation as certified by the
Secretary of State of the State (or comparable office of Nevada within ten (10)
days of the Closing Date.

                          (vii)            The Company shall have delivered to
such Buyer a certificate, executed by the Secretary of the Company and dated as
of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as
adopted by the Company’s Board of Directors in a form reasonably acceptable to
such Buyer, (ii) the Articles of Incorporation and (iii) the Bylaws, each as in
effect at the Closing, in the form attached hereto as Exhibit I.

                          (viii)            The representations and warranties
of the Company shall be true and correct as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all respects with the covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied
or complied with by the Company at or prior to the Closing Date. Such Buyer
shall have received a certificate, executed by the Chief Executive Officer of
the Company, dated as of the Closing Date, to the foregoing effect and as to
such other matters as may be reasonably requested by such Buyer in the form
attached hereto as Exhibit J.

                          (ix)            The Company shall have delivered to
such Buyer a letter from the Company’s transfer agent certifying the number of
shares of Common Stock outstanding as of a date within five days of the Closing
Date.

                          (x)            The Common Stock (I) shall be
designated for quotation or listed on the Principal Market and (II) shall not
have been suspended, as of the Closing Date, by the SEC or the Principal Market
from trading on the Principal Market nor shall suspension by the SEC or the
Principal Market have been threatened, as of the Closing Date, either (A) in
writing by the SEC or the Principal Market or (B) by falling below the minimum
listing maintenance requirements of the Principal Market.

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                          (xi)            The Company shall have obtained all
governmental, regulatory or third party consents and approvals, if any,
necessary for the sale of the Securities.

                          (xii)            Within six (6) Business Days prior to
the Closing, the Company shall have delivered or caused to be delivered to each
Buyer (A) certified copies of UCC search results, listing all effective
financing statements which name as debtor the Company or any of its Subsidiaries
filed in the prior five years to perfect an interest in any assets thereof,
together with copies of such financing statements, none of which, except as
otherwise agreed in writing by the Buyers, shall cover any of the Collateral (as
defined in the Security Documents) and the results of searches for any tax lien
and judgment lien filed against such Person or its property, which results,
except as otherwise agreed to in writing by the Buyers shall not show any such
Liens (as defined in the Security Documents); and (B) a perfection certificate,
duly completed and executed by the Company and each of its Subsidiaries, in form
and substance satisfactory to the Buyers.

                          (xiii)            Such Buyer shall have received
lock-up agreements in the form attached hereto as Exhibit K (the “Lock-Up
Agreements”, duly executed and delivered by each of Rachelle Stein, Regency
Capital Management, Merit Investments, Martin Silver and Madeline Silver as
Joint Tenants, Ronald Sparkman, David C. Skinner, Sr and Kimberley Skinner as
Joint Tenants and Kristine Coalson and Kim Skinner Ttee Kimberley and David C
Skinner Family Trust and the Company, which limits the rights of such persons to
sell or transfer Common Stock of the Company until the second anniversary of the
Closing Date.

                          (xiv)            The Company shall have delivered to
such Buyer such other documents relating to the transactions contemplated by
this Agreement as such Buyer or its counsel may reasonably request.

    8.           TERMINATION. In the event that the Closing shall not have
occurred with respect to a Buyer on or before five (5) Business Days from the
date hereof due to the Company’s or such Buyer’s failure to satisfy the
conditions set forth in Sections 6 and 7 above (and the nonbreaching party’s
failure to waive such unsatisfied condition(s)), the nonbreaching party shall
have the option to terminate this Agreement with respect to such breaching party
at the close of business on such date without liability of any party to any
other party; PROVIDED, however, that if this Agreement is terminated pursuant to
this Section 8, the Company shall remain obligated to reimburse the
non-breaching Buyers for the expenses described in Section 4(g) above.

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    9.            MISCELLANEOUS.

               (a)           Governing Law; Jurisdiction; Jury Trial. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.

               (b)           Counterparts. This Agreement may be executed in two
or more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.

               (c)           Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

               (d)           Severability. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

               (e)           Entire Agreement; Amendments. This Agreement and
the other Transaction Documents supersede all other prior oral or written
agreements between the Buyers, the Company, their affiliates and Persons acting
on their behalf with respect to the matters discussed herein, and this
Agreement, the other Transaction Documents and the instruments referenced herein
and therein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor any Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be amended other than by an instrument in writing signed by
the Company and the holders of at least a majority of the aggregate number of
Registrable Securities issued and issuable hereunder and under the Notes, and
any amendment to this Agreement made in conformity with the provisions of this
Section 9(e) shall be binding on all Buyers and holders of Securities, as
applicable. No provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the applicable Securities then outstanding. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of the Transaction Documents unless the
same consideration also is offered to all of the parties to the Transaction
Documents, holders of Notes or holders of the Warrants, as the case may be. The
Company has not, directly or indirectly, made any agreements with any Buyers
relating to the terms or conditions of the transactions contemplated by the
Transaction Documents except as set forth in the Transaction Documents. Without
limiting the foregoing, the Company confirms that, except as set forth in this
Agreement, no Buyer has made any commitment or promise or has any other
obligation to provide any financing to the Company or otherwise.

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               (f)           Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one Business Day
after deposit with an overnight courier service, in each case properly addressed
to the party to receive the same. The addresses and facsimile numbers for such
communications shall be:

  If to the Company:

  Amish Naturals, Inc.
8224 County Road 245
Holmesville, Ohio 44633
Telephone:     (330) 677-0998
Facsimile:        (330) 279 2415
Attention:       David Skinner, Sr., President

  With a copy to:

  Dennis Brovarone, Esq.
Attorney at Law
18 Mountain Laurel Drive
Littleton, Colorado 80127
Telephone:     (303) 466-4092
Facsimile:       (303) 466-4826

  If to the Transfer Agent:

  American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn NY 11204
Telephone:    (718) 921-8275
Facsimile:      (718) 921-8331
Attention:      Paula Caroppoli Vice President

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If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers, with copies to such Buyer’s representatives as set forth on the Schedule
of Buyers, <PRE>

  with a copy (for informational purposes only) to:

  Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Telephone:     (212) 756-2000
Facsimile:       (212) 593-5955
Attention:       Eleazer N. Klein, Esq.

or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iii) above, respectively.

               (g)           Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns, including any purchasers of the Notes or the Warrants.
The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the holders of at least a
majority of the aggregate number of Registrable Securities issued and issuable
hereunder, including by way of a Fundamental Transaction (unless the Company is
in compliance with the applicable provisions governing Fundamental Transactions
set forth in the Notes and the Warrants). A Buyer may assign some or all of its
rights hereunder without the consent of the Company, in which event such
assignee shall be deemed to be a Buyer hereunder with respect to such assigned
rights.

               (h)           No Third Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person.

               (i)           Survival. Unless this Agreement is terminated under
Section 8, the representations and warranties of the Company and the Buyers
contained in Sections 2 and 3, and the agreements and covenants set forth in
Sections 4, 5 and 9 shall survive the Closing. Each Buyer shall be responsible
only for its own representations, warranties, agreements and covenants
hereunder.

               (j)           Further Assurances. Each party shall do and
perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates,
instruments and documents, as any other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

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               (k)           Indemnification. In consideration of each Buyer’s
execution and delivery of the Transaction Documents and acquiring the Securities
thereunder and in addition to all of the Company’s other obligations under the
Transaction Documents, the Company shall defend, protect, indemnify and hold
harmless each Buyer and each other holder of the Securities and all of their
stockholders, partners, members, officers, directors, employees and direct or
indirect investors and any of the foregoing Persons’ agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
“Indemnitees”) from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby or
(c) any cause of action, suit or claim brought or made against such Indemnitee
by a third party (including for these purposes a derivative action brought on
behalf of the Company) and arising out of or resulting from (i) the execution,
delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (ii) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, (iii) any
disclosure made by such Buyer pursuant to Section 4(i), or (iv) the status of
such Buyer or holder of the Securities as an investor in the Company pursuant to
the transactions contemplated by the Transaction Documents. To the extent that
the foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities that is permissible under applicable law.
Except as otherwise set forth herein, the mechanics and procedures with respect
to the rights and obligations under this Section 9(k) shall be the same as those
set forth in Section 6 of the Registration Rights Agreement.

               (l)           No Strict Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.

               (m)           Remedies. Each Buyer and each holder of the
Securities shall have all rights and remedies set forth in the Transaction
Documents and all rights and remedies which such holders have been granted at
any time under any other agreement or contract and all of the rights which such
holders have under any law. Any Person having any rights under any provision of
this Agreement shall be entitled to enforce such rights specifically (without
posting a bond or other security), to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law.
Furthermore, the Company recognizes that in the event that it fails to perform,
observe, or discharge any or all of its obligations under the Transaction
Documents, any remedy at law may prove to be inadequate relief to the Buyers.
The Company therefore agrees that the Buyers shall be entitled to seek temporary
and permanent injunctive relief in any such case without the necessity of
proving actual damages and without posting a bond or other security.

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               (n)           Rescission and Withdrawal Right. Notwithstanding
anything to the contrary contained in (and without limiting any similar
provisions of) the Transaction Documents, whenever any Buyer exercises a right,
election, demand or option under a Transaction Document and the Company does not
timely perform its related obligations within the periods therein provided, then
such Buyer may rescind or withdraw, in its sole discretion from time to time
upon written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights.

               (o)           Payment Set Aside. To the extent that the Company
makes a payment or payments to the Buyers hereunder or pursuant to any of the
other Transaction Documents or the Buyers enforce or exercise their rights
hereunder or thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, foreign, state or federal law, common law or
equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.

               (p)           Independent Nature of Buyers’ Obligations and
Rights. The obligations of each Buyer under any Transaction Document are several
and not joint with the obligations of any other Buyer, and no Buyer shall be
responsible in any way for the performance of the obligations of any other Buyer
under any Transaction Document. Nothing contained herein or in any other
Transaction Document, and no action taken by any Buyer pursuant hereto or
thereto, shall be deemed to constitute the Buyers as, and the Company
acknowledges that the Buyers do not so constitute, a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Buyers are in any way acting in concert or as a group, and
the Company will not assert any such claim with respect to such obligations or
the transactions contemplated by the Transaction Documents and the Company
acknowledges that the Buyers are not acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction
Documents. The Company acknowledges and each Buyer confirms that it has
independently participated in the negotiation of the transaction contemplated
hereby with the advice of its own counsel and advisors. Each Buyer shall be
entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any other
Transaction Documents, and it shall not be necessary for any other Buyer to be
joined as an additional party in any proceeding for such purpose.

[SIGNATURE PAGE FOLLOWS]

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        IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

COMPANY:

AMISH NATURALS, INC.

By: /s/ David Skinner, Sr.
       Name: David Skinner, Sr.
       Title: President

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        IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

BUYER:

CASTLERIGG MASTER INVESTMENTS LTD.

By: /s/ Timothy O'Brien
       Name: Timothy O'Brien
       Title: Chief Financial Officer

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SCHEDULE OF BUYERS

(1)

(2)

(3)

(4)

(5)

(6)

(7)`

(8)

(9)

Buyer

Address and
Facsimile Number

Aggregate
Principal
Amount of
Notes

Number of
Series E
Warrant Shares

Number of
Series F
Warrant Shares

Prepaid Interest

Purchase Price

Net Purchase Price

Legal Representative's Address and Facsimile Number

                 

Castlerigg Master Investments Ltd.

c/o Sandell Asset Management
40 West 57th St
26th Floor
New York, NY 10019
Attention: Cem Hacioglu/Matthew Pliskin
Fax: 212-603-5710
Telephone: 212-603-5700
Residence: British Virgin Islands

$3,125,000

5,000,000

2,500,000

$625,000

$3,125,000

$2,500,000

Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Attention: Eleazer Klein, Esq.
Facsimile: (212) 593-5955
Telephone: (212) 756-2376

                 

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EXHIBITS

Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K Form of Notes
Form of Warrants
Form of Registration Rights Agreement
Form of Pledge Agreement
Form of Security Agreement
Form of Guaranty
Form of Irrevocable Transfer Agent Instructions
Form of Opinion of Company's Counsel
Form of Secretary's Certificate
Form of Officer's Certificate
Form of Lock-Up Agreement

SCHEDULES

Schedule 3(a)
Schedule 3(k)
Schedule 3(l)
Schedule 3(q)
Schedule 3(r)
Schedule 3(s)
Schedule 3(t)
Schedule 3(x)
Schedule 3(z)
Schedule 3(ee) Subsidiaries
SEC Documents
Absence of Certain Changes
Transactions with Affiliates
Equity Capitalization
Indebtedness and Other Contracts
Absence of Litigation
Intellectual Property Rights
Subsidiary Rights
Ranking of Notes

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