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SUBSCRIPTION AGREEMENT
 
 
THIS SUBSCRIPTION AGREEMENT (this “Agreement”), dated as of November ____, 2006,
by and among Oxford Media, Inc., a Nevada corporation (the “Company”), and the
subscribers identified on the signature page hereto (each a “Subscriber” and if
more than one, collectively “Subscribers”).
 
WHEREAS, the Company, Palisades Master Fund, LP (“Palisades”) and Longview Fund,
L.P. (“Longview” and together with Palisades, the “Prior Purchasers) previously
entered into a Subscription Agreement, dated September 1, 2006 (“Prior
Agreement”) whereby the Prior Purchasers purchased $9,500,000 of principal
amount of 10% promissory notes (“Prior Notes”) of the Company and warrants to
purchase Common Stock (“Prior Warrants”) (collectively, the Prior Agreement, the
Prior Notes, the Prior Warrants and all other documents and agreements entered
into in connection with the Prior Agreement, the “Prior Transaction Documents”);
 
WHEREAS, contemporaneously herewith, the Company and the Prior Purchasers are
amending certain terms and conditions of the Prior Transaction Documents to make
the terms and conditions therein equal to, and pari passu with, the terms and
conditions hereunder and providing consent for allowing Midsummer Investment,
Ltd. (“Midsummer”) to subscribe on identical terms as set forth in the Prior
Transaction Documents;
 
WHEREAS, the parties desire that, upon the terms and subject to the conditions
contained herein, the Company shall issue and sell to Midsummer, as provided
herein, and Midsummer, in the aggregate, shall purchase Two Million Dollars
($2,000,000) below (the “Purchase Price”) of principal amount of 12% promissory
notes of the Company (“Note” or “Notes”), in the form annexed hereto as Exhibit
A, and as additional consideration, the Company shall issue to the Subscribers a
due diligence fee in the form of the Company’s $0.001 par value Common Stock
(the “Common Stock”) pursuant to Section 3, below (the “Due Diligence Shares”),
and warrants (the “Warrants”) in the form attached hereto as Exhibit B, to
purchase shares of Common Stock (the “Warrant Shares”). The Notes, the Due
Diligence Shares, the Warrants and the Warrant Shares are collectively referred
to herein as the “Securities”; and
 
WHEREAS, the Company and the Subscribers are executing and delivering this
Agreement in reliance upon an exemption from securities registration afforded by
the provisions of Section 4(2) and/or Regulation D (“Regulation D”) as
promulgated by the United States Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended (the “1933 Act”);
 
WHEREAS, the new cash aggregate proceeds of the sale of the Securities
contemplated hereby will be paid, transferred, and otherwise applied pursuant to
the provisions of the “Payment Instructions” reflected on Exhibit C.
 
NOW, THEREFORE, in consideration of the mutual covenants and other agreements
contained in this Agreement the Company and the Subscribers hereby agree as
follows:
 
1.    Closing. Subject to the satisfaction or waiver of the terms and conditions
of this Agreement, on the Closing Date, each Subscriber shall purchase and the
Company shall sell to each Subscriber a Note in the principal amount designated
on the signature page hereto and the amount of Warrants determined pursuant to
Section 3 below, and issue to each Subscriber the due diligence fee determined
pursuant to Section 4, below. The aggregate principal amount of the Notes to be
purchased by the Subscribers on the Closing Date shall, in the aggregate, be
equal to the Purchase Price. The “Closing Date” shall be the date that
subscriber funds representing at least Two Million Dollars ($2,000,000) is
transmitted by wire transfer or otherwise to or for the benefit of the Company.
 

 
 

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2.    [Intentionally Deleted]

3.    Warrants. On the Closing Date, the Company will issue and deliver Warrants
to the Subscribers in an amount equal to 100% of the Purchase Price paid by each
respective Subscriber divided by $1.00. The exercise price to acquire a Warrant
Share upon exercise of a Warrant shall be Fifty Cents ($0.50) per share. The
Warrants shall be exercisable until five (5) years after the issue date of the
Warrants. The holder of the Warrants is granted the registration rights set
forth in this Agreement. The Warrant exercise price and the number of shares of
Common Stock issuable upon exercise of the Warrants shall be equitably adjusted
to offset the effect of stock splits, stock dividends, pro rata distributions of
property or equity interests to the Company’s shareholders, and as otherwise
described in the Warrant.

4.    Due Diligence Fee. Each Subscriber shall receive that number of shares of
Common Stock equal to thirty percent (30%) of the Purchase Price paid by each
Subscriber (the “Due Diligence Fee”) divided by $1.00 (subject to adjustment for
reverse and forward stock splits and the like). The Due Diligence Shares shall
be delivered to each respective Subscriber no later than three (3) business days
after the Closing Date for each respective Subscriber.

5.    Security Interest. The Subscribers will be granted a security interest in
certain assets of the Company and Subsidiaries (as defined in Section 7(a) of
this Agreement), including ownership of the Subsidiaries, to be memorialized in
a “Amended and Restated Security Agreement”, a form of which is annexed hereto
as Exhibit D, which shall be entered into with the Prior Purchasers and
supersede the Security Agreement entered into in connection with the Prior
Agreement. Each Subsidiary will execute and deliver to the Subscribers a form of
“Guaranty” annexed hereto as Exhibit E. The Company will execute such other
agreements, documents and financing statements reasonably requested by
Subscribers, which will be filed at the Company’s expense with such
jurisdictions, states and counties designated by the Subscribers. The Company
will also execute all such documents reasonably necessary in the opinion of
Subscribers to memorialize and further protect the security interest described
herein. The Subscribers and Prior Purchasers will appoint an Agent pursuant to
and under the Amended and Restated Security Agreement to represent them
collectively in connection with the security interest to be granted to the
Subscribers and the Prior Purchasers.
 
6.    Subscriber’s Representations and Warranties. Each Subscriber hereby
represents and warrants to and agrees with the Company only as to such
Subscriber that:

(a)   Organization and Standing of the Subscribers. If the Subscriber is an
entity, such Subscriber is a corporation, partnership or other entity duly
incorporated or organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization and has the requisite
corporate power to own its assets and to carry on its business.

(b)   Authorization and Power. Each Subscriber has the requisite power and
authority to enter into and perform this Agreement and to purchase the
Securities being sold to it hereunder. The execution, delivery and performance
of this Agreement by such Subscriber and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate or partnership action, and no further consent or
authorization of such Subscriber or its Board of Directors, stockholders,
partners, members, as the case may be, is required. This Agreement has been duly
authorized, executed and delivered by such Subscriber and constitutes, or shall
constitute when executed and delivered, a valid and binding obligation of the
Subscriber enforceable against the Subscriber in accordance with the terms
thereof.

 
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(c)   No Conflicts. The execution, delivery and performance of this Agreement
and the consummation by such Subscriber of the transactions contemplated hereby
or relating hereto do not and will not (i) result in a violation of such
Subscriber’s charter documents or bylaws or other organizational documents 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 or obligation to which such Subscriber is a party or by
which its properties or assets are bound, or result in a violation of any law,
rule, or regulation, or any order, judgment or decree of any court or
governmental agency applicable to such Subscriber or its properties (except for
such conflicts, defaults and violations as would not, individually or in the
aggregate, have a material adverse effect on such Subscriber). Such Subscriber
is not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Agreement or to
purchase the Notes or acquire the Warrants in accordance with the terms hereof,
provided that for purposes of the representation made in this sentence, such
Subscriber is assuming and relying upon the accuracy of the relevant
representations and agreements of the Company herein.

(d)   Information on Company. The Subscriber has been furnished with or has had
access at the EDGAR Website of the Commission to the Company’s Form 10-KSB for
the year ended December 31, 2005 and all periodic reports filed with the
Commission thereafter, but not later than five business days before the Closing
Date (hereinafter referred to as the “Reports”). In addition, the Subscriber has
received in writing from the Company such other information concerning its
operations, financial condition and other matters as the Subscriber has
requested in writing (such other information is collectively, the “Other Written
Information”), and considered all factors the Subscriber deems material in
deciding on the advisability of investing in the Securities.
 
(e)   Information on Subscriber. The Subscriber is, and will be at the time of
the exercise of the Warrants, an “accredited investor”, as such term is defined
in Regulation D promulgated by the Commission under the 1933 Act, is experienced
in investments and business matters, has made investments of a speculative
nature and has purchased securities of United States publicly-owned companies in
private placements in the past and, with its representatives, has such knowledge
and experience in financial, tax and other business matters as to enable the
Subscriber to utilize the information made available by the Company to evaluate
the merits and risks of and to make an informed investment decision with respect
to the proposed purchase of the Securities, which represents a speculative
investment. The Subscriber has the authority and is duly and legally qualified
to purchase and own the Securities. The Subscriber is able to bear the risk of
such investment for an indefinite period and to afford a complete loss thereof.
The information set forth on the signature page hereto regarding the Subscriber
is accurate.
(f)    Notes, Warrants, and Due Diligence Shares. On the Closing Date, the
Subscriber will purchase the Notes and Warrants and receive the Due Diligence
Shares for its own account and not with a view toward, or for resale in
connection with, the public sale or any distribution thereof, but Subscriber
does not agree to hold the Securities for any minimum amount of time.
 
(g)   Compliance with Securities Act. The Subscriber understands and agrees that
the Securities have not been registered under the 1933 Act or any applicable
state securities laws, by reason of their issuance in a transaction that does
not require registration under the 1933 Act (based in part on the accuracy of
the representations and warranties of Subscriber contained herein), and that
such Securities must be held indefinitely unless a subsequent disposition is
registered under the 1933 Act or any applicable state securities laws or is
exempt from such registration. Notwithstanding anything to the contrary
contained in this Agreement, such Subscriber may transfer (without restriction
and without the need for an opinion of counsel) the Securities to its Affiliates
(as defined below) provided that each such Affiliate is an “accredited investor”
under Regulation D and such Affiliate agrees to be bound by the terms and
conditions of this Agreement. For the purposes of this Agreement, an “Affiliate”
of any person or entity means any other person or entity directly or indirectly
controlling, controlled by or under direct or indirect common control with such
person or entity. Affiliate when employed in connection with the Company
includes each Subsidiary [as defined in Section 7(a)] of the Company. For
purposes of this definition, “control” means the power to direct the management
and policies of such person or firm, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise.

 
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(h)   Legend. The Due Diligence Shares issued as the Due Diligence Fee and the
Warrant Shares shall bear the following or similar legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO OXFORD MEDIA, INC. THAT SUCH
REGISTRATION IS NOT REQUIRED.”
 
(i)    Warrants Legend. The Warrants shall bear the following
 
or similar legend:
 
“THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR ANY APPLICABLE STATE
SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO OXFORD MEDIA,
INC. THAT SUCH REGISTRATION IS NOT REQUIRED.”

(j)   Note Legend. The Note shall bear the following legend:
 
“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT OR
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO OXFORD MEDIA, INC. THAT SUCH
REGISTRATION IS NOT REQUIRED.”

 
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(k)   Communication of Offer. The offer to sell the Securities was directly
communicated to the Subscriber by the Company. At no time was the Subscriber
presented with or solicited by any leaflet, newspaper or magazine article, radio
or television advertisement, or any other form of general advertising or
solicited or invited to attend a promotional meeting otherwise than in
connection and concurrently with such communicated offer.
 
(l)    Authority; Enforceability. This Agreement and other agreements delivered
together with this Agreement or in connection herewith have been duly
authorized, executed and delivered by the Subscriber and are valid and binding
agreements enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights generally and
to general principles of equity; and Subscriber has full corporate power and
authority necessary to enter into this Agreement and such other agreements and
to perform its obligations hereunder and under all other agreements entered into
by the Subscriber relating hereto.

(m)     No Governmental Review. Each Subscriber understands that no United
States federal or state agency or any other governmental or state agency has
passed on or made recommendations or endorsement of the Securities or the
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.

(n)   Correctness of Representations. Each Subscriber represents as to such
Subscriber that the foregoing representations and warranties are true and
correct as of the date hereof and, unless a Subscriber otherwise notifies the
Company prior to the Closing Date, shall be true and correct as of the Closing
Date.

(o)   Selected Pre-Existing Rights. With regard to Longview and Palisades, each
hereby represents, and the Company hereby agrees as follows:

(i)   their respective re-set provisions for conversion of debt and equity and
exercise of warrants is hereby re-set hereunder to Fifty Cents ($0.50) per
share, as reflected on Schedule 7(f)(iii); and

(ii)   their respective registration rights previously granted to them are now
included under this Agreement, as reflected on Schedule 7(f)(iv).  

The foregoing representations and warranties shall survive the Closing Date
until three years after the Closing Date.

7.    Company Representations and Warranties. The Company represents and
warrants to and agrees with each Subscriber as follows, except as set forth in
the Reports or the Other Written Information and as otherwise qualified in the
Transaction Documents:
 

 
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(a)   Due Incorporation. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power to own its properties and to
carry on its business is disclosed in the Reports. The Company is duly qualified
as a foreign corporation to do business and is in good standing in each
jurisdiction where the nature of the business conducted or property owned by it
makes such qualification necessary, other than those jurisdictions in which the
failure to so qualify would not have a Material Adverse Effect. For purpose of
this Agreement, a “Material Adverse Effect” shall mean a material adverse effect
on the financial condition, results of operations, properties or business of the
Company taken individually, or in the aggregate, as a whole. For purposes of
this Agreement, “Subsidiary” means, with respect to any entity at any date, any
corporation, limited or general partnership, limited liability company, trust,
estate, association, joint venture or other business entity) of which more than
50% of (i) the outstanding capital stock having (in the absence of
contingencies) ordinary voting power to elect a majority of the board of
directors or other managing body of such entity, (ii) in the case of a
partnership or limited liability company, the interest in the capital or profits
of such partnership or limited liability company or (iii) in the case of a
trust, estate, association, joint venture or other entity, the beneficial
interest in such trust, estate, association or other entity business is, at the
time of determination, owned or controlled directly or indirectly through one or
more intermediaries, by such entity. All the Company’s Subsidiaries as of the
Closing Date are set forth on Schedule 7(a) hereto, with SVI specifically being
deemed to be a Subsidiary hereunder. For purposes of this Agreement the term
“SVI Acquisition Transaction” shall mean the acquisition transaction pursuant to
that certain stock purchase agreement dated July 19, 2006 among the Company and
SVI Systems, Inc., pursuant to which the Company acquired all of the outstanding
capital stock of SVI Hotel Corporation (“SVI”) and SVI shall became a Subsidiary
of the Company, in accordance with those agreements already executed by and
between the relevant parties, copies of which have been delivered to each
Subscriber requesting such copies, receipt of which is hereby acknowledged (the
“SVI Acquisition Agreements”)
 
(b)   Outstanding Stock. All issued and outstanding shares of capital stock of
the Company and each of its subsidiaries have been duly authorized and validly
issued and are fully paid and nonassessable.
 
(c)   Authority; Enforceability. This Agreement, the Notes, the Warrants, the
Escrow Agreement, Security Agreement, Guaranty and any other agreements
delivered together with this Agreement or in connection herewith (collectively
“Transaction Documents”) have been duly authorized, executed and delivered by
the Company and Subsidiaries (as the case may be) and are valid and binding
agreements enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights generally and
to general principles of equity. The Company and Subsidiaries have full
corporate power and authority necessary to enter into and deliver the
Transaction Documents and to perform their obligations thereunder.
 
(d)   Additional Issuances. There are no outstanding agreements or preemptive or
similar rights affecting the Company’s common stock or equity and no outstanding
rights, warrants or options to acquire, or instruments convertible into or
exchangeable for, or agreements or understandings with respect to the sale or
issuance of any shares of common stock or equity of the Company or other equity
interest in any of the Subsidiaries of the Company except as described on
Schedule 7(d). The Common stock of the Company on a fully diluted basis
outstanding as of the last trading day preceding the Closing Date hereunder is
set forth on Schedule 7(d).
 
(e)   Consents. No consent, approval, authorization or order of any court,
governmental agency or body or arbitrator having jurisdiction over the Company,
or any of its Affiliates, the OTC Bulletin Board (the “Bulletin Board”) nor the
Company’s shareholders is required for the execution by the Company of the
Transaction Documents and compliance and performance by the Company of its
obligations under the Transaction Documents, including, without limitation, the
issuance and sale of the Securities. The Transaction Documents and the Company’s
performance of its obligations thereunder have been approved unanimously by the
Company’s directors.
 
(f)    No Violation or Conflict. Assuming the representations and warranties of
the Subscribers in Section 6 are true and correct, neither the issuance and sale
of the Securities nor the performance of the Company’s obligations under this
Agreement and all other agreements entered into by the Company relating thereto
by the Company will:

 
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(i)    violate, conflict with, result in a breach of, or constitute a default
(or an event which with the giving of notice or the lapse of time or both would
be reasonably likely to constitute a default) under (A) the articles or
certificate of incorporation, charter or bylaws of the Company, (B) to the
Company’s knowledge, any decree, judgment, order, law, treaty, rule, regulation
or determination applicable to the Company of any court, governmental agency or
body, or arbitrator having jurisdiction over the Company or any of its
subsidiaries or over the properties or assets of the Company or any of its
Affiliates, (C) the terms of any bond, debenture, note or any other evidence of
indebtedness, or any agreement, stock option or other similar plan, indenture,
lease, mortgage, deed of trust or other instrument to which the Company or any
of its Affiliates or subsidiaries is a party, by which the Company or any of its
Affiliates or subsidiaries is bound, or to which any of the properties of the
Company or any of its Affiliates or subsidiaries is subject, or (D) the terms of
any “lock-up” or similar provision of any underwriting or similar agreement to
which the Company, or any of its Affiliates or subsidiaries is a party except
the violation, conflict, breach, or default of which would not have a Material
Adverse Effect on the Company; or
 
(ii)   result in the creation or imposition of any lien, charge or encumbrance
upon the Securities or any of the assets of the Company, its subsidiaries or any
of its Affiliates; or
 
(iii)     result in the activation of any anti-dilution rights or a reset or
repricing of any debt or security instrument of any other creditor or equity
holder of the Company, nor result in the acceleration of the due date of any
obligation of the Company, other than as reflected on Schedule 7(f)(iii); or
 
(iv)     result in the activation of any piggy-back registration rights of any
person or entity holding securities of the Company or having the right to
receive securities of the Company, other than as reflected on Schedule 7(f)(iv);
or
 
(g)   The Securities. The Securities upon issuance:
 
(i)   are, or will be, free and clear of any security interests, liens, claims
or other encumbrances, subject to restrictions upon transfer under the 1933 Act
and any applicable state securities laws;

(ii)   have been, or will be, duly and validly authorized and upon exercise of
the Warrants, the Warrant Shares will be duly and validly issued, fully paid and
nonassessable and, if registered pursuant to the 1933 Act and resold pursuant to
an effective registration statement, will be free trading and unrestricted;
 
(iii)        will not have been issued or sold in violation of any preemptive or
other similar rights of the holders of any securities of the Company;
 
(iv)     will not subject the holders thereof to personal liability by reason of
being such holders provided Subscriber’s representations herein are true and
accurate and Subscribers take no actions or fail to take any actions required
for their purchase of the Securities to be in compliance with all applicable
laws and regulations; and
 

 
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(v)   will have been issued in reliance upon an exemption from the registration
requirements of and will not result in a violation of Section 5 under the 1933
Act.
 
(h)   Litigation. Other than as described in the Reports, there is no pending
or, to the best knowledge of the Company, threatened action, suit, proceeding or
investigation before any court, governmental agency or body, or arbitrator
having jurisdiction over the Company, or any of its Affiliates that would affect
the execution by the Company or the performance by the Company of its
obligations under the Transaction Documents. Except as disclosed in the Reports,
there is no pending or, to the best knowledge of the Company, basis for or
threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company,
or any of its Affiliates which litigation if adversely determined would have a
Material Adverse Effect.
 
(i)    Reporting Company. The Company is a publicly-held company subject to
reporting obligations pursuant to Section 13 of the Securities Exchange Act of
1934, as amended (the “1934 Act”) and has a class of common shares registered
pursuant to Section 12(g) of the 1934 Act. Pursuant to the provisions of the
1934 Act, the Company has timely filed all reports and other materials required
to be filed thereunder with the Commission during the preceding twenty-four
months.
 
(j)    No Market Manipulation. The Company has not taken, and will not take,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
the Common Stock of the Company to facilitate the sale or resale of the
Securities or affect the price at which the Securities may be issued or resold.
 
(k)   Information Concerning Company. The Reports contain all material
information relating to the Company and its operations and financial condition
as of their respective dates and all the information required to be disclosed
therein. Since the last day of the fiscal year of the most recent audited
financial statements included in the Reports (“Latest Financial Date”), and
except as modified in the Other Written Information or in the Schedules hereto,
there has been no Material Adverse Event relating to the Company’s business,
financial condition or affairs not disclosed in the Reports. The Reports do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances when made. The Company has not provided
to the Subscribers any material non-public information.
 
(l)    Stop Transfer. The Securities, when issued, will be restricted
securities. The Company will not issue any stop transfer order or other order
impeding the sale, resale or delivery of any of the Securities, except as may be
required by any applicable federal or state securities laws and unless
contemporaneous notice of such instruction is given to the Subscriber.
 
(m)        Defaults. The Company is not in violation of its articles of
incorporation or bylaws. The Company is (i) not in default under or in violation
of any other material agreement or instrument to which it is a party or by which
it or any of its properties are bound or affected, which default or violation
would have a Material Adverse Effect on the Company, (ii) not in default with
respect to any order of any court, arbitrator or governmental body or subject to
or party to any order of any court or governmental authority arising out of any
action, suit or proceeding under any statute or other law respecting antitrust,
monopoly, restraint of trade, unfair competition or similar matters, or (iii) to
its knowledge not in violation of any statute, rule or regulation of any
governmental authority which violation would have a Material Adverse Effect on
the Company.
 

 
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(n)   No Integrated Offering. Neither the Company, nor any of its Affiliates,
nor any person acting on its or 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 cause the offer of the Securities pursuant to
this Agreement 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 the Bulletin Board. Nor
will the Company or any of its Affiliates or subsidiaries take any action or
steps that would cause the offer or issuance of the Securities to be integrated
with other offerings. The Company will not conduct any offering other than the
transactions contemplated hereby that will be integrated with the offer or
issuance of the Securities.
 
(o)   No General Solicitation. Neither the Company, nor any of its Affiliates,
nor to its knowledge, 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 under the 1933 Act) in connection with the offer or sale of the
Securities.
 
(p)   Listing. The Company’s common stock is quoted on the Bulletin Board under
the symbol OXMI. The Company has not received any oral or written notice that
its common stock is not eligible nor will become ineligible for quotation on the
Bulletin Board nor that its common stock does not meet all requirements for the
continuation of such quotation. The Company satisfies all the requirements for
the continued quotation of its common stock on the Bulletin Board.
 
(q)   No Undisclosed Liabilities. The Company has no liabilities or obligations
which are material, individually or in the aggregate, which are not disclosed in
the Reports and Other Written Information, other than in the ordinary course of
the Company’s businesses since December 31, 2005 and which, individually or in
the aggregate, would reasonably be expected to have a Material Adverse Effect
other than as set forth in Schedule 7(q). Prior to Closing, the Company will
deliver to all Subscribers making a request for same a copy of the most recently
prepared financials for SVI. Attached hereto as Exhibit H are the audited
financial statements of SVI for the period ended 31 December 2005. The Company
hereby represents and warrants that the financial statements attached as Exhibit
H are true, complete, and accurate in all material respects, and present fairly
the financial position of SVI as of the date thereof
 
(r)   No Undisclosed Events or Circumstances. Since December 31, 2005, no event
or circumstance has occurred or exists with respect to the Company or its
businesses, properties, operations or financial condition, that, under
applicable law, rule or regulation, requires public disclosure or announcement
prior to the date hereof by the Company but which has not been so publicly
announced or disclosed in the Reports.
 
(s)   Capitalization. The authorized and outstanding capital stock of the
Company and Subsidiaries as of the date of this Agreement (not including the
Securities) are set forth on Schedule 7(d). Except as set forth on Schedule
7(d), there are no options, warrants, or rights to subscribe to, securities,
rights or obligations convertible into or exchangeable for or giving any right
to subscribe for any shares of capital stock of the Company or any of its
Subsidiaries. All of the outstanding shares of Common Stock of the Company have
been duly and validly authorized and issued and are fully paid and
nonassessable.
 
(t)    Dilution. The Company’s executive officers and directors understand the
nature of the Securities being sold hereby and recognize that the issuance of
the Securities will have a potential dilutive effect on the equity holdings of
other holders of the Company’s equity or rights to receive equity of the
Company. The board of directors of the Company has unanimously concluded, in its
good faith business judgment, that the issuance of the Securities is in the best
interests of the Company. The Company specifically acknowledges that its
obligation to issue the Warrant Shares upon exercise of the Warrants is binding
upon the Company and enforceable regardless of the dilution such issuance may
have on the ownership interests of other shareholders of the Company or parties
entitled to receive equity of the Company.

 
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(u)   No Disagreements with Accountants and Lawyers. There are no disagreements
of any kind presently existing, or reasonably anticipated by the Company to
arise, between the Company and the accountants and lawyers formerly or presently
employed by the Company, including but not limited to disputes or conflicts over
payment owed to such accountants and lawyers.

(v)   DTC Status/Transfer Agent. The Company’s transfer agent is eligible to
participate in and the Common Stock is eligible for transfer pursuant to the
Depository Trust Company Automated Securities Transfer Programs. The name,
address, telephone number, fax number, contact person and email address of the
Company transfer agent are set forth on Schedule 7(v) hereto.

(w)     Investment Company. Neither the Company nor any Affiliate is an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.

(x)   Subsidiary Representations. The Company makes each of the representations
contained in Sections 7(a), (b), (d), (e), (f), (h), (k), (m), (q), (r), (s),
(u) and (w) of this Agreement, as same relate to each Subsidiary of the Company,
with the same qualifications to each such representation.

(y)   Correctness of Representations. The Company represents that the foregoing
representations and warranties are true and correct as of the date hereof in all
material respects, and, unless the Company otherwise notifies the Subscribers
prior to the Closing Date, shall be true and correct in all material respects as
of the Closing Date.
 
(z)   Survival. The foregoing representations and warranties shall survive until
three years after the Closing Date.
 
(aa)    Acknowledgment Regarding Subscriber’s Trading Activity. Anything in this
Agreement or elsewhere herein to the contrary notwithstanding, it is understood
and acknowledged by the Company (i) that none of the Subscribers have been asked
to agree, nor has any Subscriber 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) that past or future open market or other transactions by any
Subscriber, including Short Sales, and specifically including, without
limitation, Short Sales or “derivative” transactions, before or after the
closing of this or future private placement transactions, may negatively impact
the market price of the Company’s publicly-traded securities; (iii) that any
Subscriber, and counter-parties in “derivative” transactions to which any such
Subscriber is a party, directly or indirectly, presently may have a “short”
position in the Common Stock, and (iv) that each Subscriber 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 (a) one or more Subscribers may engage in hedging activities at various
times during the period that the Securities are outstanding, including, without
limitation, during the periods that the value of the Securities deliverable with
respect to Securities are being determined and (b) such hedging activities (if
any) could reduce the value of the existing stockholders’ equity interests in
the Company at and after the time that the hedging activities are being
conducted.  The Company acknowledges that such aforementioned hedging activities
do not constitute a breach of this or any.

 
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(bb)   Registration Rights. Any and all outstanding rights to cause the Company
to effect the registration under the Securities Act of any securities of the
Company are as set forth on Schedule 7(bb) attached hereto.
 
8.   Regulation D Offering. The offer and issuance of the Securities to the
Subscribers is being made pursuant to the exemption from the registration
provisions of the 1933 Act afforded by Section 4(2) of the 1933 Act and/or Rule
506 of Regulation D promulgated thereunder. On the Closing Date, the Company
will provide an opinion reasonably acceptable to Subscriber from the Company’s
legal counsel opining on the availability of an exemption from registration
under the 1933 Act as it relates to the offer and issuance of the Securities and
other matters reasonably requested by Subscribers. The Company will provide, at
the Company’s expense, such other legal opinions in the future as are reasonably
necessary for the issuance and resale of the Common Stock issuable upon exercise
of the Warrants.
 
9.1.       Covenants of the Company. The Company covenants and agrees with the
Subscribers as follows:
 
(a)   Stop Orders. The Company will advise the Subscribers, within two hours
after the Company receives notice of issuance by the Commission, any state
securities commission or any other regulatory authority of any stop order or of
any order preventing or suspending any offering of any securities of the
Company, or of the suspension of the qualification of the Common Stock of the
Company for offering or sale in any jurisdiction, or the initiation of any
proceeding for any such purpose.
 
(b)   Listing. The Company shall promptly secure the listing of the Warrant
Shares upon each national securities exchange, or automated quotation system
upon which they are or become eligible for listing (subject to official notice
of issuance) and shall maintain such listing so long as any Warrants are
outstanding. The Company will maintain the listing of its Common Stock on the
American Stock Exchange, Nasdaq SmallCap Market, Nasdaq National Market System,
Bulletin Board, or New York Stock Exchange (whichever of the foregoing is at the
time the principal trading exchange or market for the Common Stock (the
“Principal Market”)), and will comply in all respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the
Principal Market, as applicable. The Company will provide the Subscribers copies
of all notices it receives notifying the Company of the threatened and actual
delisting of the Common Stock from any Principal Market. As of the date of this
Agreement and the Closing Date, the Bulletin Board is and will be the Principal
Market.
 
(c)   Market Regulations. The Company shall notify the Commission, the Principal
Market and applicable state authorities, in accordance with their requirements,
of the transactions contemplated by this Agreement, and shall take all other
necessary action and proceedings as may be required and permitted by applicable
law, rule and regulation, for the legal and valid issuance of the Securities to
the Subscribers and promptly provide copies thereof to Subscriber.
 
(d)   Reporting Requirements. From the date of this Agreement and until the
sooner of (i) two (2) years after the Closing Date, or (ii) until all the
Warrant Shares have been resold or transferred by all the Subscribers pursuant
to the Registration Statement or pursuant to Rule 144, without regard to volume
limitation, the Company will (v) cause its Common Stock to continue to be
registered under Section 12(b) or 12(g) of the 1934 Act, (x) comply in all
respects with its reporting and filing obligations under the 1934 Act, (y)
comply with all reporting requirements that are applicable to an issuer with a
class of shares registered pursuant to Section 12(b) or 12(g) of the 1934 Act,
as applicable, and (z) comply with all requirements related to any registration
statement filed pursuant to this Agreement. The Company will use its best
efforts not to take any action or file any document (whether or not permitted by
the 1933 Act or the 1934 Act or the rules thereunder) to terminate or suspend
such registration or to terminate or suspend its reporting and filing
obligations under said acts until two (2) years after the Closing Date. Until
the earlier of the resale of the Warrant Shares by each Subscriber or two (2)
years after the Warrants have been exercised, the Company will use its best
efforts to continue the listing or quotation of the Common Stock on the
Principal Market or other market with the reasonable consent of Subscribers
holding a majority of the Warrants and Warrant Shares, and will comply in all
respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of the Principal Market. The Company agrees to timely file a
Form D with respect to the Securities if required under Regulation D and to
provide a copy thereof to each Subscriber promptly after such filing.

 
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(e)   Use of Proceeds. The proceeds of the Offering will be employed by the
Company for the purposes set forth on Schedule 9.1(e) hereto. Except as set
forth on Schedule 9.1(e), the Purchase Price may not and will not be used for
accrued and unpaid officer and director salaries, payment of financing related
debt, redemption of outstanding notes or equity instruments of the Company,
litigation related expenses or settlements, brokerage fees, nor non-trade
obligations outstanding on a Closing Date. For so long as any Notes are
outstanding, the Company will not prepay any financing related debt obligations,
nor redeem any equity instruments of the Company without the express written
consent of Subscribers.
 
(f)    Reservation. Prior to the Closing Date, the Company undertakes to
reserve, pro rata, on behalf of each holder of Warrant, from its authorized but
unissued common stock, a number of common shares equal to the amount of Warrant
Shares issuable upon exercise of the Warrants. Failure to have sufficient shares
reserved pursuant to this Section 9(f) for three (3) consecutive business days
or ten (10) days in the aggregate shall be a material default of the Company’s
obligations under this Agreement.
 
(g)   Taxes. From the date of this Agreement and until the sooner of (i) two (2)
years after the Closing Date, or (ii) until all the Warrant Shares have been
resold or transferred by all the Subscribers pursuant to the Registration
Statement or pursuant to Rule 144, without regard to volume limitations, the
Company will promptly pay and discharge, or cause to be paid and discharged,
when due and payable, all lawful taxes, assessments and governmental charges or
levies imposed upon the income, profits, property or business of the Company;
provided, however, that any such tax, assessment, charge or levy need not be
paid if the validity thereof shall currently be contested in good faith by
appropriate proceedings and if the Company shall have set aside on its books
adequate reserves with respect thereto, and provided, further, that the Company
will pay all such taxes, assessments, charges or levies forthwith upon the
commencement of proceedings to foreclose any lien which may have attached as
security therefore.
 
(h)   Insurance. From the date of this Agreement and until the sooner of (i) two
(2) years after the Closing Date, or (ii) until all the Warrant Shares have been
resold or transferred by all the Subscribers pursuant to the Registration
Statement or pursuant to Rule 144, without regard to volume limitations, the
Company will keep its assets which are of an insurable character insured by
financially sound and reputable insurers against loss or damage by fire,
explosion and other risks customarily insured against by companies in the
Company’s line of business, in amounts sufficient to prevent the Company from
becoming a co-insurer and not in any event less than one hundred percent (100%)
of the insurable value of the property insured; and the Company will maintain,
with financially sound and reputable insurers, insurance against other hazards
and risks and liability to persons and property to the extent and in the manner
customary for companies in similar businesses similarly situated and to the
extent available on commercially reasonable terms.
 
 
 
 

 
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(i)    Books and Records. From the date of this Agreement and until the sooner
of (i) two (2) years after the Closing Date, or (ii) until all the Warrant
Shares have been resold or transferred by all the Subscribers pursuant to the
Registration Statement or pursuant to Rule 144, without regard to volume
limitations, the Company will keep true records and books of account in which
full, true and correct entries will be made of all dealings or transactions in
relation to its business and affairs in accordance with generally accepted
accounting principles applied on a consistent basis.
 
(j)    Governmental Authorities. From the date of this Agreement and until the
sooner of (i) two (2) years after the Closing Date, or (ii) until all the
Warrant Shares have been resold or transferred by all the Subscribers pursuant
to the Registration Statement or pursuant to Rule 144, without regard to volume
limitations, the Company shall duly observe and conform in all material respects
to all valid requirements of governmental authorities relating to the conduct of
its business or to its properties or assets.
 
(k)   Intellectual Property. From the date of this Agreement and until the
sooner of (i) two (2) years after the Closing Date, or (ii) until all the
Warrant Shares have been resold or transferred by all the Subscribers pursuant
to the Registration Statement or pursuant to Rule 144, without regard to volume
limitations, the Company shall maintain in full force and effect its corporate
existence, rights and franchises and all licenses and other rights to use
intellectual property owned or possessed by it and reasonably deemed to be
necessary to the conduct of its business.
 
(l)    Properties. From the date of this Agreement and until the sooner of (i)
two (2) years after the Closing Date, or (ii) until all the Warrant Shares have
been resold or transferred by all the Subscribers pursuant to the Registration
Statement (as defined in Section 13.1(iv) hereof) or pursuant to Rule 144,
without regard to volume limitations, the Company will keep its properties in
good repair, working order and condition, reasonable wear and tear excepted, and
from time to time make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto; and the Company will at all times comply
with each provision of all leases to which it is a party or under which it
occupies property if the breach of such provision could reasonably be expected
to have a Material Adverse Effect.
 
(m)        Confidentiality/Public Announcement. From the date of this Agreement
and until the sooner of (i) two (2) years after the Closing Date, or (ii) until
all the Warrant Shares have been resold or transferred by all the Subscribers
pursuant to the Registration Statement or pursuant to Rule 144, without regard
to volume limitations, the Company agrees that except in connection with a Form
8-K or the Registration Statement, it will not disclose publicly or privately
the identity of the Subscribers unless expressly agreed to in writing by a
Subscriber or only to the extent required by law and then only upon five days
prior notice to Subscriber. In any event and subject to the foregoing, the
Company undertakes to file a Form 8-K or make a public announcement describing
the Offering not later than the first business day after the Closing Date. A
form of the proposed Form 8-K or public announcement is annexed hereto as
Exhibit F. In the Form 8-K or public announcement, the Company will specifically
disclose the amount of common stock outstanding immediately after the Closing.
 
(n)   Non-Public Information. The Company covenants and agrees that neither it
nor any other person acting on its behalf will provide any Subscriber or its
agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such Subscriber shall have
agreed in writing to receive such information. The Company understands and
confirms that each Subscriber shall be relying on the foregoing representations
in effecting transactions in securities of the Company. In any event, the
Company will offer to the Subscriber an opportunity to review and comment on the
Registration Statement thereto between three and five business days prior to the
proposed filing date thereof.

 
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(o)   Offering Restrictions. For so long as Notes are outstanding, the Company
will not enter into any equity line of credit or similar agreement, nor issue
nor agree to issue any floating or variable priced equity linked instruments nor
any of the foregoing or equity with price reset rights. The Company further
agrees that for so long as the Notes are outstanding, and during the pendency of
an Event of Default, except for the Excepted Issuances [as defined in Section
14(a)], the Company will not enter into an agreement to nor issue any equity,
convertible debt or other securities convertible into common stock or equity of
the Company nor modify any of the foregoing which may be outstanding at anytime,
without the prior written consent of the Subscriber, which consent may not be
unreasonably withheld.

(p)   Negative Covenants. So long as the Notes are outstanding, without the
consent of the Subscribers, the Company will not and will not permit any of its
Subsidiaries to directly or indirectly:
 
(i)   create, incur, assume or suffer to exist any pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
security title, mortgage, security deed or deed of trust, easement or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any lease or title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement perfecting a security interest under the Uniform Commercial
Code or comparable law of any jurisdiction) (each, a “Lien”) upon any of its
property, whether now owned or hereafter acquired except for (i) the Excepted
Issuances (as defined in Section 14(a) hereof), (ii) (a) Liens imposed by law
for taxes that are not yet due or are being contested in good faith and for
which adequate reserves have been established in accordance with generally
accepted accounting principles; (b) carriers’, warehousemen’s, mechanics’,
material men’s, repairmen’s and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not overdue by
more than 30 days or that are being contested in good faith and by appropriate
proceedings; (c) pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social
security laws or regulations; (d) deposits to secure the performance of bids,
trade contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in the
ordinary course of business; (e) Liens created with respect to the financing of
the purchase of new property in the ordinary course of the Company’s business up
to the amount of the purchase price of such property, or created with respect to
Excepted Issuances, provided no such lien may attach to any such assets
purchased with proceeds of the Offering; or (f) easements, zoning restrictions,
rights-of-way and similar encumbrances on real property imposed by law or
arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected
property (each of (a) through (f), a “Permitted Lien”) and (iii) indebtedness
for borrowed money which is not senior or pari passu in right of payment to the
payment of the Notes;

(ii)   amend its certificate of incorporation, bylaws or its charter documents
so as to adversely affect any rights of the Subscriber;

(iii)        repay, repurchase or offer to repay, repurchase or otherwise
acquire or make any dividend or distribution in respect of any of its Common
Stock, preferred stock, or other equity securities other than to the extent
permitted or required under the Transaction Documents; or

 
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(iv)     engage in any transactions with any officer, director, employee or any
Affiliate of the Company, 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
officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in each case in excess
of $10,000 other than (i) for payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the Company, and
(iii) for other employee benefits, including stock option agreements under any
stock option plan of the Company.
 
9.2.    Injunction - Posting of Bond. In the event a Subscriber shall elect to
exercise the Warrant in whole or in part, the Company may not refuse exercise
based on any claim that such Subscriber or any one associated or affiliated with
such Subscriber has been engaged in any violation of law, or for any other
reason, unless, an injunction from a court, on notice, restraining and or
enjoining exercise of all or part of said Warrant shall have been sought and
obtained by the Company and the Company has posted a surety bond for the benefit
of such Subscriber in the amount of 130% of the aggregate purchase price of the
Warrant Shares which are subject to the injunction, which bond shall remain in
effect until the completion of arbitration/litigation of the dispute and the
proceeds of which shall be payable to such Subscriber to the extent Subscriber
obtains judgment in Subscriber’s favor.

9.3.      Buy-In. In addition to any other rights available to the Subscriber,
if the Company fails to deliver to the Subscriber such shares issuable upon
exercise of a Warrant on or before the Delivery Date (as defined in the Warrant)
and if after nine (9) business days after the exercise date of the Warrant the
Subscriber or a broker on Subscriber’s behalf purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by such Subscriber of the Common Stock which the Subscriber was entitled to
receive upon such exercise (a “Buy-In”), then the Company shall pay in cash to
the Subscriber (in addition to any remedies available to or elected by the
Subscriber) the amount by which (A) the Subscriber’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (B) the aggregate exercise price for which such exercise was
not timely honored, together with interest thereon at a rate of 15% per annum,
accruing until such amount and any accrued interest thereon is paid in full
(which amount shall be paid as liquidated damages and not as a penalty). For
example, if the Subscriber purchases shares of Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of $10,000 of Warrant exercise price, the Company shall be required to
pay the Subscriber $1,000, plus interest. The Subscriber shall provide the
Company written notice indicating the amounts payable to the Subscriber in
respect of the Buy-In.

9.4.      Seniority. Except as otherwise provided for herein, and as
specifically provided for under the SVI Acquisition Transaction, until the Notes
are fully satisfied, the Company shall not grant nor allow any security interest
to be taken in the assets of the Company or any subsidiary of the Company; nor
issue any debt, equity or other instrument which would give the holder thereof
directly or indirectly, a right in any assets of the Company or any Subsidiary
of the Company, superior or equal or pari passu to any right of the Subscriber
to such assets. The parties hereby acknowledge and agree to permit the second
lien on the assets of the SVI Hotel Corporation created under the SVI
Acquisition Transaction, as further provided for under that certain
Subordination Agreement attached hereto as Exhibit G.

9.5.      Mandatory Redemption at Subscriber’s Election. In the event (i) the
Company is prohibited from issuing Warrant Shares, (ii) the Company fails to
timely deliver Warrant Shares on a Delivery Date, as defined in the Warrant,
(iii) upon the occurrence of any other Event of Default (as defined in the Note
or in this Agreement), and any of the foregoing continues for more than thirty
(30) business days, (iv) a Change in Control (as defined below), or (v) of the
liquidation, dissolution or winding up of the Company, then at the Subscriber’s
election, the Company must pay to the Subscriber ten (10) business days after
request by the Subscriber (“Calculation Period”), a sum of money equal to
multiplying up to the outstanding principal amount of the Note designated by the
Subscriber by 120%, together with accrued but unpaid interest thereon
(“Mandatory Redemption Payment”). Upon receipt of the Mandatory Redemption
Payment, the corresponding Note principal and interest will be deemed paid and
no longer outstanding. For purposes of this Section 9.5, “Change in Control”
shall mean (i) the Company no longer having a class of shares publicly traded or
listed on a Principal Market, (ii) the Company becoming a Subsidiary of another
entity (other than a corporation formed by the Company for purposes of
reincorporation in another U.S. jurisdiction), or (iii) the sale, lease or
transfer of substantially all the assets of the Company or Subsidiaries.

 
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9.6.       Redemption. The Securities shall not be redeemable or mandatorily
convertible except as described in the Note and Warrants.

10.        Broker. The Company on the one hand, and each Subscriber (for himself
only) on the other hand, agrees to indemnify the other against and hold the
other harmless from any and all liabilities to any persons claiming brokerage
commissions or finder’s fees on account of services purported to have been
rendered on behalf of the indemnifying party in connection with this Agreement
or the transactions contemplated hereby and arising out of such party’s actions.
The Company represents that there are no parties entitled to receive fees,
commissions, or similar payments in connection with the Offering except that the
Due Diligence Shares will be issued to the Subscribers. 
 
11.        [Intentionally Left Blank].
 
12.        Covenants of the Company and Subscriber Regarding Indemnification.
 
(a)   The Company agrees to indemnify, hold harmless, reimburse and defend the
Subscribers, the Subscribers’ officers, directors, agents, Affiliates, control
persons, and principal shareholders, against any claim, cost, expense,
liability, obligation, loss or damage (including reasonable legal fees) of any
nature, incurred by or imposed upon the Subscriber or any such person which
results, arises out of or is based upon (i) any material misrepresentation by
Company or breach of any warranty by Company in this Agreement or in any
Exhibits or Schedules attached hereto, or other agreement delivered pursuant
hereto; or (ii) after any applicable notice and/or cure periods, any breach or
default in performance by the Company of any covenant or undertaking to be
performed by the Company hereunder, or any other agreement entered into by the
Company and Subscriber relating hereto.
 
(b)   Each Subscriber agrees to indemnify, hold harmless, reimburse and defend
the Company and each of the Company’s officers, directors, agents, Affiliates,
control persons against any claim, cost, expense, liability, obligation, loss or
damage (including reasonable legal fees) of any nature, incurred by or imposed
upon the Company or any such person which results, arises out of or is based
upon (i) any material misrepresentation by such Subscriber in this Agreement or
in any Exhibits or Schedules attached hereto, or other agreement delivered
pursuant hereto; or (ii) after any applicable notice and/or cure periods, any
breach or default in performance by such Subscriber of any covenant or
undertaking to be performed by such Subscriber hereunder, or any other agreement
entered into by the Company and Subscribers, relating hereto.
 
(c)   In no event shall the liability of any Subscriber or permitted successor
hereunder or under any other agreement delivered in connection herewith be
greater in amount than the dollar amount of the net proceeds actually received
by such Subscriber upon the sale of Registrable Securities (as defined herein).

(d)   The procedures set forth in Section 13.6 shall apply to the
indemnification set forth in Sections 12(a) and 12(b) above.

 
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13.1.     Registration Rights. The Company hereby grants the following
registration rights to holders of the Securities, which is to expressly include
the Due Diligence Shares.

(i)    On one occasion, for a period commencing one hundred and fifty-one (151)
days after the Closing Date, but not later than two (2) years after the Closing
Date, upon a written request therefore from any record holder or holders of more
than 50% of the Warrant Shares issued and issuable upon exercise of the
Warrants, the Company shall prepare and file with the Commission a registration
statement under the 1933 Act registering the Registrable Securities, as defined
in Section 13.1(iv) hereof, which are the subject of such request for
unrestricted public resale by the holder thereof. For purposes of Sections
13.1(i) and 13.1(ii), Registrable Securities shall not include Securities which
are (A) registered for resale in an effective registration statement, (B)
included for registration in a pending registration statement, or (C) which have
been issued without further transfer restrictions after a sale or transfer
pursuant to Rule 144 under the 1933 Act. Upon the receipt of such request, the
Company shall promptly give written notice to all other record holders of the
Registrable Securities that such registration statement is to be filed and shall
include in such registration statement Registrable Securities for which it has
received written requests within ten (10) days after the Company gives such
written notice. Such other requesting record holders shall be deemed to have
exercised their demand registration right under this Section 13.1(i).

(ii)   If the Company at any time proposes to register any of its securities
under the 1933 Act for sale to the public, whether for its own account or for
the account of other security holders or both, except with respect to
registration statements on Forms S-4, S-8 or another form not available for
registering the Registrable Securities for sale to the public, provided the
Registrable Securities are not otherwise registered for resale by the
Subscribers or Holder pursuant to an effective registration statement, each such
time it will give at least fifteen (15) days’ prior written notice to the record
holder of the Registrable Securities of its intention so to do. Upon the written
request of the holder, received by the Company within ten (10) days after the
giving of any such notice by the Company, to register any of the Registrable
Securities not previously registered, the Company will cause such Registrable
Securities as to which registration shall have been so requested to be included
with the securities to be covered by the registration statement proposed to be
filed by the Company, all to the extent required to permit the sale or other
disposition of the Registrable Securities so registered by the holder of such
Registrable Securities (the “Seller” or “Sellers”). In the event that any
registration pursuant to this Section 13.1(ii) shall be, in whole or in part, an
underwritten public offering of common stock of the Company, the number of
shares of Registrable Securities to be included in such an underwriting may be
reduced by the managing underwriter if and to the extent that the Company and
the underwriter shall reasonably be of the opinion that such inclusion would
adversely affect the marketing of the securities to be sold by the Company
therein; provided, however, that the Company shall notify the Seller in writing
of any such reduction. Notwithstanding the foregoing provisions, or Section 13.4
hereof, the Company may withdraw or delay or suffer a delay of any registration
statement referred to in this Section 13.1(ii) without thereby incurring any
liability to the Seller.

(iii)         If, at the time any written request for registration is received
by the Company pursuant to Section 13.1(i), the Company has determined to
proceed with the actual preparation and filing of a registration statement under
the 1933 Act in connection with the proposed offer and sale for cash of any of
its securities for the Company’s own account and the Company actually does file
such other registration statement, such written request shall be deemed to have
been given pursuant to Section 13.1(ii) rather than Section 13.1(i), and the
rights of the holders of Registrable Securities covered by such written request
shall be governed by Section 13.1(ii).

 
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(iv)     The Company shall file with the Commission a Form SB-2 registration
statement (the “Registration Statement”) (or such other form that it is eligible
to use) in order to register the Registrable Securities for resale and
distribution under the 1933 Act no later than 01 December 2006 (the “Filing
Date”), and cause to be declared effective not later than 15 April 2007 (the
“Effective Date”). The Company will register not less than a number of shares of
common stock in the aforedescribed registration statement that is equal to 100%
of the Warrant Shares issuable pursuant to this Agreement upon exercise of the
Warrants and the Due Diligence Shares (the “Registrable Securities”). The
Registrable Securities shall be reserved and set aside exclusively for the
benefit of each Warrant holder, pro rata, and not issued, employed or reserved
for anyone other than the Warrant holders. The Registration Statement will
immediately be amended or additional registration statements will be immediately
filed by the Company as necessary to register additional shares of Common Stock
to allow the public resale of all Common Stock included in and issuable by
virtue of the Registrable Securities. Except with the written consent of the
Subscriber or as set forth on Schedule 13.1 hereto, no securities of the Company
other than the Registrable Securities will be included in the Registration
Statement. It shall be deemed a Non-Registration Event if at any time after the
date the Registration Statement is declared effective by the Commission (“Actual
Effective Date”) the Company has registered for unrestricted resale on behalf of
the Subscribers fewer than 100% of the Registrable Securities.

(v)   Except for a registration statement filed on behalf of the Subscribers
pursuant to this Agreement, or in connection with the SVI Acquisition
Transaction or as otherwise expressly permitted under this Agreement, the
Company will not file with the Commission or with state regulatory authorities,
any registration statements including but not limited to Forms S-8, or amend any
already filed registration statement to increase the amount of Common Stock
registered therein, or reduce the price of which such Common Stock is registered
therein without the consent of the Subscribers until the Notes are no longer
outstanding.

13.2.     Registration Procedures. If and whenever the Company is required by
the provisions of Section 13.1(i), 13.1(ii) or 13.1(iv) to effect the
registration of any Registrable Securities under the 1933 Act, the Company will,
as expeditiously as possible:

(a)   subject to the timelines provided in this Agreement, prepare and file with
the Commission a registration statement required by Section 13, with respect to
such securities and use its best efforts to cause such registration statement to
become and remain effective for the period of the distribution contemplated
thereby (determined as herein provided), promptly provide to the holders of the
Registrable Securities copies of all filings and Commission letters of comment
and notify Subscribers (by telecopier and by e-mail addresses provided by
Subscribers) and Feldman Weinstein & Smith LLP (by telecopier and by email to
rcharron@feldmanweinstein.com) on or before the first business day thereafter
that the Company receives notice that (i) the Commission has no comments or no
further comments on the Registration Statement, and (ii) the registration
statement has been declared effective (failure to timely provide notice as
required by this Section 13.2(a) shall be a material breach of the Company’s
obligation and an Event of Default as defined in the Notes and a
Non-Registration Event as defined in Section 13.4 of this Agreement);

(b)   prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective until such
registration statement has been effective for a period of two (2) years, and
comply with the provisions of the 1933 Act with respect to the disposition of
all of the Registrable Securities covered by such registration statement in
accordance with the Sellers’ intended method of disposition set forth in such
registration statement for such period;

 
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(c)   furnish to the Sellers, at the Company’s expense, such number of copies of
the registration statement and the prospectus included therein (including each
preliminary prospectus) as such persons reasonably may request in order to
facilitate the public sale or their disposition of the securities covered by
such registration statement or make them electronically available;

(d)   use its commercially reasonable best efforts to register or qualify the
Registrable Securities covered by such registration statement under the
securities or “blue sky” laws of New York and such jurisdictions as the Sellers
shall request in writing, provided, however, that the Company shall not for any
such purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent to
general service of process in any such jurisdiction;
 
(e)   if applicable, list the Registrable Securities covered by such
registration statement with any securities exchange on which the Common Stock of
the Company is then listed;

(f)    notify the Subscribers within two hours of the Company’s becoming aware
that a prospectus relating thereto is required to be delivered under the 1933
Act, of the happening of any event of which the Company has knowledge as a
result of which the prospectus contained in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing or which
becomes subject to a Commission, state or other governmental order suspending
the effectiveness of the registration statement covering any of the Registrable
Securities;

(g)   provided same would not be in violation of the provision of Regulation FD
under the 1934 Act, make available for inspection by the Sellers, and any
attorney, accountant or other agent retained by the Seller or underwriter, all
publicly available, non-confidential financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company’s
officers, directors and employees to supply all publicly available,
non-confidential information reasonably requested by the seller, attorney,
accountant or agent in connection with such registration statement; and

(h)   provide to the Sellers copies of the Registration Statement and amendments
thereto five business days prior to the filing thereof with the Commission.

13.3.     Provision of Documents. In connection with each registration described
in this Section 13, each Seller will furnish to the Company in writing such
information and representation letters with respect to itself and the proposed
distribution by it as reasonably shall be necessary in order to assure
compliance with federal and applicable state securities laws.

 
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13.4.     Non-Registration Events. The Company and the Subscribers agree that
the Sellers will suffer damages if the Registration Statement is not filed by
the Filing Date and not declared effective by the Commission by the Effective
Date, and any registration statement required under Section 13.1(i) or 13.1(ii)
is not filed within 60 days after written request and declared effective by the
Commission within 120 days after such request, and maintained in the manner and
within the time periods contemplated by Section 13 hereof, and it would not be
feasible to ascertain the extent of such damages with precision. Accordingly, if
(A) the Registration Statement is not filed on or before the Filing Date, (B) is
not declared effective on or before the Effective Date, (C) due to the action or
inaction of the Company the Registration Statement is not declared effective
within three (3) business days after receipt by the Company or its attorneys of
a written or oral communication from the Commission that the Registration
Statement will not be reviewed or that the Commission has no further comments,
(D) if the registration statement described in Sections 13.1(i) or 13.1(ii) is
not filed within 60 days after such written request, or is not declared
effective within 120 days after such written request, or (E) any registration
statement described in Sections 13.1(i), 13.1(ii) or 13.1(iv) is filed and
declared effective but shall thereafter cease to be effective without being
succeeded within fifteen (15) business days by an effective replacement or
amended registration statement or for a period of time which shall exceed thirty
(30) days in the aggregate per year (defined as every rolling period of 365
consecutive days commencing on the Actual Effective Date (each such event
referred to in clauses A through E of this Section 13.4 is referred to herein as
a “Non-Registration Event”), then the Company shall deliver to the holder of
Registrable Securities, as Liquidated Damages, an amount equal to two percent
(2%) for each thirty (30) days (or such lesser pro-rata amount for any period of
less than thirty (30) days) of the principal and accrued interest of the
outstanding Notes owned of record by such holder which are subject to such
Non-Registration Event on the first day of each thirty (30) day or shorter
period for which Liquidated Damages are calculable. The Company must pay the
Liquidated Damages in cash. The Liquidated Damages must be paid within ten (10)
days after the end of each thirty (30) day period or shorter part thereof for
which Liquidated Damages are payable. In the event a Registration Statement is
filed by the Filing Date but is withdrawn prior to being declared effective by
the Commission, then such Registration Statement will be deemed to have not been
filed and Liquidated Damages will be calculated accordingly. All oral or written
comments received from the Commission relating to the Registration Statement
must be satisfactorily responded to within ten (10) business days after receipt
of comments from the Commission. Failure to timely respond to Commission
comments is a Non-Registration Event for which Liquidated Damages shall accrue
and be payable by the Company to the holders of Notes at the same rate set forth
above. Notwithstanding the foregoing, the Company shall not be liable to the
Subscriber under this Section 13.4 for (i) any events or delays occurring as a
consequence of the acts or omissions of the Subscribers contrary to the
obligations undertaken by Subscribers in this Agreement; or, (ii) by virtue of
the application of Section 15(j), below. Liquidated Damages will not accrue nor
be payable pursuant to this Section 13.4 nor will a Non-Registration Event be
deemed to have occurred for times during which Registrable Securities are
transferable by the holder of Registrable Securities pursuant to Rule 144(k)
under the 1933 Act. Notwithstanding any other provision contained herein, the
maximum aggregate liquidated damages payable to a Holder under this Agreement
shall be 24.9% of the aggregate Purchase Price paid by such Holder pursuant to
this Agreement
 
13.5.     Expenses. All expenses incurred by the Company in complying with
Section 13, including, without limitation, all registration and filing fees,
printing expenses (if required), fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
reasonable counsel fees) incurred in connection with complying with state
securities or “blue sky” laws, fees of the National Association of Securities
Dealers, Inc., transfer taxes, and fees of transfer agents and registrars, are
called “Registration Expenses.” All underwriting discounts and selling
commissions applicable to the sale of Registrable Securities are called “Selling
Expenses”. The Company will pay all Registration Expenses in connection with the
registration statement under Section 13. Selling Expenses in connection with
each registration statement under Section 13 shall be borne by the Seller and
may be apportioned among the Sellers in proportion to the number of shares sold
by the Seller relative to the number of shares sold under such registration
statement or as all Sellers thereunder may agree.
 
13.6.     Indemnification and Contribution.
 

 
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(a)   In the event of a registration of any Registrable Securities under the
1933 Act pursuant to Section 13, the Company will, to the extent permitted by
law, indemnify and hold harmless the Seller, each officer of the Seller, each
director of the Seller, each underwriter of such Registrable Securities
thereunder and each other person, if any, who controls such Seller or
underwriter within the meaning of the 1933 Act, against any losses, claims,
damages or liabilities, joint or several, to which the Seller, or such
underwriter or controlling person may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Registrable Securities was registered under the 1933 Act
pursuant to Section 13, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances when made, and will subject to the provisions of
Section 13.6(c) reimburse the Seller, each such underwriter and each such
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable to
the Seller to the extent that any such damages arise out of or are based upon an
untrue statement or omission made in any preliminary prospectus if (i) the
Seller failed to send or deliver a copy of the final prospectus delivered by the
Company to the Seller with or prior to the delivery of written confirmation of
the sale by the Seller to the person asserting the claim from which such damages
arise, (ii) the final prospectus would have corrected such untrue statement or
alleged untrue statement or such omission or alleged omission, or (iii) to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by any such Seller, or
any such controlling person in writing specifically for use in such registration
statement or prospectus.
 
(b)   In the event of a registration of any of the Registrable Securities under
the 1933 Act pursuant to Section 13, each Seller severally but not jointly will,
to the extent permitted by law, indemnify and hold harmless the Company, and
each person, if any, who controls the Company within the meaning of the 1933
Act, each officer of the Company who signs the registration statement, each
director of the Company, each underwriter and each person who controls any
underwriter within the meaning of the 1933 Act, against all losses, claims,
damages or liabilities, joint or several, to which the Company or such officer,
director, underwriter or controlling person may become subject under the 1933
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the registration
statement under which such Registrable Securities were registered under the 1933
Act pursuant to Section 13, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and each such officer, director,
underwriter and controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action, provided, however, that the Seller will be
liable hereunder in any such case if and only to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such Seller, as such, furnished
in writing to the Company by such Seller specifically for use in such
registration statement or prospectus, and provided, further, however, that the
liability of the Seller hereunder shall be limited to the net proceeds actually
received by the Seller from the sale of Registrable Securities covered by such
registration statement.
 

 
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(c)   Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 13.6(c) and shall only
relieve it from any liability which it may have to such indemnified party under
this Section 13.6(c), except and only if and to the extent the indemnifying
party is prejudiced by such omission. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and, to the extent it shall wish, to assume and undertake the defense thereof
with counsel satisfactory to such indemnified party, and, after notice from the
indemnifying party to such indemnified party of its election so to assume and
undertake the defense thereof, the indemnifying party shall not be liable to
such indemnified party under this Section 13.6(c) for any legal expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with counsel
so selected, provided, however, that, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, the indemnified parties, as a group, shall have the right to select one
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the reasonable expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.
 
(d)   In order to provide for just and equitable contribution in the event of
joint liability under the 1933 Act in any case in which either (i) a Seller, or
any controlling person of a Seller, makes a claim for indemnification pursuant
to this Section 13.6 but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 13.6 provides for indemnification in such case, or (ii)
contribution under the 1933 Act may be required on the part of the Seller or
controlling person of the Seller in circumstances for which indemnification is
not provided under this Section 13.6; then, and in each such case, the Company
and the Seller will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion so that the Seller is responsible only for the portion
represented by the percentage that the public offering price of its securities
offered by the registration statement bears to the public offering price of all
securities offered by such registration statement, provided, however, that, in
any such case, (y) the Seller will not be required to contribute any amount in
excess of the public offering price of all such securities sold by it pursuant
to such registration statement; and (z) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 13(f) of the 1933 Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
 
13.7.  Delivery of Unlegended Shares.
 
(a)   Within four (4) business days (such fourth business day being the
“Unlegended Shares Delivery Date”) after the business day on which the Company
has received (i) a notice that Warrant Shares have been sold pursuant to a
registration statement or Rule 144 under the 1933 Act, (ii) a representation
that the prospectus delivery requirements, or the requirements of Rule 144, as
applicable and if required, have been satisfied, and (iii) the original share
certificates representing the shares of Common Stock that have been sold, and
(iv) in the case of sales under Rule 144, customary representation letters of
the Subscriber and/or Subscriber’s broker regarding compliance with the
requirements of Rule 144, the Company at its expense, (y) shall deliver, and
shall cause legal counsel selected by the Company to deliver to its transfer
agent (with copies to Subscriber) an appropriate instruction and opinion of such
counsel, directing the delivery of shares of Common Stock without any legends
including the legend set forth in Section 4 above, reissuable pursuant to any
effective and current Registration Statement described in Section 13 of this
Agreement or pursuant to Rule 144 under the 1933 Act (the “Unlegended Shares”);
and (z) cause the transmission of the certificates representing the Unlegended
Shares together with a legended certificate representing the balance of the
submitted Warrant Shares certificate, if any, to the Subscriber at the address
specified in the notice of sale, via express courier, by electronic transfer or
otherwise on or before the Unlegended Shares Delivery Date.

 
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(b)   In lieu of delivering physical certificates representing the Unlegended
Shares, if the Company’s transfer agent is participating in the Depository Trust
Company (“DTC”) Fast Automated Securities Transfer program, upon request of a
Subscriber, so long as the certificates therefore do not bear a legend and the
Subscriber is not obligated to return such certificate for the placement of a
legend thereon, the Company must cause its transfer agent to electronically
transmit the Unlegended Shares by crediting the account of Subscriber’s prime
Broker with DTC through its Deposit Withdrawal Agent Commission system. Such
delivery must be made on or before the Unlegended Shares Delivery Date.

(c)   The Company understands that a delay in the delivery of the Unlegended
Shares pursuant to Section 13 hereof later than two business days after the
Unlegended Shares Delivery Date could result in economic loss to a Subscriber.
As compensation to a Subscriber for such loss, the Company agrees to pay late
payment fees (as liquidated damages and not as a penalty) to the Subscriber for
late delivery of Unlegended Shares in the amount of $100 per business day after
the Delivery Date for each $10,000 of Purchase Price (as defined in the
Warrants) of the Unlegended Shares subject to the delivery default. If during
any 360 day period, the Company fails to deliver Unlegended Shares as required
by this Section 13.7 for an aggregate of thirty (30) days, then each Subscriber
or assignee holding Securities subject to such default may, at its option,
require the Company to redeem all or any portion of the Warrant Shares subject
to such default at a price per share equal to 120% of the Purchase Price of such
Warrant Shares (“Unlegended Redemption Amount”).
 
(d)  In addition to any other rights available to a Subscriber, if the Company
fails to deliver to a Subscriber Unlegended Shares as required pursuant to this
Agreement, within six (6) business days after the Unlegended Shares Delivery
Date and the Subscriber or a broker on the Subscriber’s behalf, purchases (in an
open market transaction or otherwise) shares of common stock to deliver in
satisfaction of a sale by such Subscriber of the shares of Common Stock which
the Subscriber was entitled to receive from the Company (a “Buy-In”), then the
Company shall pay in cash to the Subscriber (in addition to any remedies
available to or elected by the Subscriber) the amount by which (A) the
Subscriber’s total purchase price (including brokerage commissions, if any) for
the shares of common stock so purchased exceeds (B) the aggregate purchase price
of the shares of Common Stock delivered to the Company for reissuance as
Unlegended Shares together with interest thereon at a rate of 15% per annum,
accruing until such amount and any accrued interest thereon is paid in full
(which amount shall be paid as liquidated damages and not as a penalty). For
example, if a Subscriber purchases shares of Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to $10,000 of purchase
price of shares of Common Stock delivered to the Company for reissuance as
Unlegended Shares, the Company shall be required to pay the Subscriber $1,000,
plus interest. The Subscriber shall provide the Company written notice
indicating the amounts payable to the Subscriber in respect of the Buy-In.
 
(e)   In the event a Subscriber shall request delivery of Unlegended Shares as
described in Section 13.7 and the Company is required to deliver such Unlegended
Shares pursuant to Section 13.7, the Company may not refuse to deliver
Unlegended Shares based on any claim that such Subscriber or any one associated
or affiliated with such Subscriber has been engaged in any violation of law, or
for any other reason, unless, an injunction or temporary restraining order from
a court, on notice, restraining and or enjoining delivery of such Unlegended
Shares or exercise of all or part of said Warrant shall have been sought and
obtained by the Company or at the Company’s request or with the Company’s
assistance, and the Company has posted a surety bond for the benefit of such
Subscriber in the amount of 120% of the amount of the aggregate purchase price
of the Common Stock and Warrant Shares which are subject to the injunction or
temporary restraining order, which bond shall remain in effect until the
completion of arbitration/litigation of the dispute and the proceeds of which
shall be payable to such Subscriber to the extent Subscriber obtains judgment in
Subscriber’s favor.

 
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14.     (a)     Right of First Refusal. For so long as any amount remains
outstanding on the Notes or until the Registration Statement has been effective
for 365 days, whichever is longer, the Subscribers shall be given not less than
seven (7) business days prior written notice of any proposed sale by the Company
of its common stock or other securities or debt obligations, except in
connection with (i) full or partial consideration in connection with a strategic
merger, acquisition, consolidation or purchase of substantially all of the
securities or assets of corporation or other entity, (ii) the Company’s issuance
of securities in connection with strategic license agreements and other
partnering arrangements so long as such issuances are not for the purpose of
raising capital which holders of such securities or debt are not at any time
granted registration rights, (iii) the Company’s issuance of Common Stock or the
issuances or grants of options to purchase Common Stock pursuant to stock option
plans and employee stock purchase plans duly adopted by a majority of the
non-employee members of the Board of Directors of the Company or a majority of
the members of a committee of non-employee directors established for such
purpose, (iv) the Company’s issuance of Common Stock upon the exercise or
exchange of or conversion of any Securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares of Common
Stock issued and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise, exchange or
conversion price of such securities, (v) up to 300,000 shares of Common Stock or
Common Stock equivalents (subject to adjustment for forward and reverse stock
splits, recapitalizations and the like), in the aggregate, in any 12 month
period, issuable to service providers of the Company (with no registration
rights of any kind, including but not limited to S-8 registrations, and (vi) as
a result of the exercise of Warrants which are granted or issued pursuant to
this Agreement or that have been issued prior to the Closing Date, the issuance
of which has been disclosed in a Report filed not less than five (5) days prior
to the Closing Date (collectively the foregoing are “Excepted Issuances”). The
Subscribers who exercise their rights pursuant to this Section 14(a) shall have
the right during the seven (7) business days following receipt of the notice to
purchase such offered common stock, debt or other securities in accordance with
the terms and conditions set forth in the notice of sale in the same proportion
to each other as their purchase of Notes in the Offering. In the event such
terms and conditions are modified during the notice period, the Subscribers
shall be given prompt notice of such modification and shall have the right
during the seven (7) business days following the notice of modification to
exercise such right. Payment for such purchase by the Subscribers may be made by
tender of the Note and all sums due under the Note.
 
(b)   Favored Nations Provision. Other than in connection with the Excepted
Issuances, if at any time Warrants are outstanding, the Company shall offer,
issue or agree to issue any common stock or securities convertible into or
exercisable for shares of common stock (or modify any of the foregoing which may
be outstanding) to any person or entity at a price per share or conversion or
exercise price per share which shall be less than the Warrant exercise price,
without the consent of each Subscriber holding Notes, Warrants, or Warrant
Shares, then the Company shall issue, for each such occasion, additional shares
of Common Stock to each Subscriber so that the average per share purchase price
of the shares of Common Stock issued to the Subscriber (of only the Warrant
Shares still owned by the Subscriber) is equal to such other lower price per
share and the Warrant exercise price shall automatically be adjusted to such
other lower price. The delivery to the Subscriber of the additional shares of
Common Stock shall be not later than the closing date of the transaction giving
rise to the requirement to issue additional shares of Common Stock. The
Subscriber is granted the registration rights described in Section 13 hereof in
relation to such additional shares of Common Stock except that the Filing Date
and Effective Date vis-à-vis such additional common shares shall be,
respectively, the thirtieth (30th) and sixtieth (60th) date after the closing
date giving rise to the requirement to issue the additional shares of Common
Stock. For purposes of the issuance and adjustment described in this paragraph,
the issuance of any security of the Company carrying the right to convert such
security into shares of Common Stock or of any warrant, right or option to
purchase Common Stock shall result in the issuance of the additional shares of
Common Stock upon the sooner of the agreement to or actual issuance of such
convertible security, warrant, right or option and again at any time upon any
subsequent issuances of shares of Common Stock upon exercise of such conversion
or purchase rights if such issuance is at a price lower than the Conversion
Price or Warrant exercise price in effect upon such issuance. The rights of the
Subscriber set forth in this Section 12 are in addition to any other rights the
Subscriber has pursuant to this Agreement, any Transaction Document, and any
other agreement referred to or entered into in connection herewith.

 
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(c)   Maximum Exercise of Rights. In the event the exercise of the rights
described in Sections 14(a) and 14(b) would or could result in the issuance of
an amount of common stock of the Company that would exceed the maximum amount
that may be issued to a Subscriber calculated in the manner described in Section
10 of the Warrant, then the issuance of such additional shares of common stock
of the Company to such Subscriber will be deferred in whole or in part until
such time as such Subscriber is able to beneficially own such common stock
without exceeding the applicable maximum amount set forth calculated in the
manner described in Section 10 of the Warrant. The determination of when such
common stock may be issued shall be made by each Subscriber as to only such
Subscriber.
 
15.        Miscellaneous.

(a)   Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Company, to: Oxford Media, Inc., One
Technology Drive, Building H, Irvine, CA 92618, Attn: Lewis Jaffe, President and
CEO, telecopier: (949) 341-0060, with a copy by telecopier only to: Keith A.
Rosenbaum, Esq., Spectrum Law Group, LLP, 1900 Main Street, Suite 125, Irvine,
CA 92614, telecopier: (949) 851-5940, and (ii) if to the Subscribers, to: the
one or more addresses and telecopier numbers indicated on the signature pages
hereto, with an additional copy by telecopier only to: Robert F. Charron,
Feldman Weinstein & Smith LLP, 420 Lexington Avenue, New York, New York 10170,
telecopier number: (212) 404-4741.

(b)   Entire Agreement; Assignment. This Agreement and other documents delivered
in connection herewith represent the entire agreement between the parties hereto
with respect to the subject matter hereof and may be amended only with the
consent of the Subscribers and the Company. Neither the Company nor the
Subscribers have relied on any representations not contained or referred to in
this Agreement and the documents delivered herewith. No right or obligation of
the Company shall be assigned without prior notice to and the written consent of
the Subscribers.

 
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(c)   Counterparts/Execution. This Agreement may be executed in any number of
counterparts, all of which when taken together shall be considered one and the
same agreement, it being understood that all parties need not sign the same
counterpart. In the event that any signature is delivered by fax or by e-mail
delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof. Each of the parties hereby expressly
forever waives any and all rights to raise the use of a fax machine or E-Mail to
deliver a signature, or the fact that any signature or agreement or instrument
was transmitted or communicated through the use of a fax machine or E-Mail, as a
defense to the formation of a contract.

(d)   Law Governing this Agreement. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
principles of conflicts of laws. Any action brought by either party against the
other concerning the transactions contemplated by this Agreement shall be
brought only in the state courts of New York or in the federal courts located in
the state of New York. The parties and the individuals executing this Agreement
and other agreements referred to herein or delivered in connection herewith on
behalf of the Company agree to submit to the jurisdiction of such courts and
waive trial by jury. The prevailing party shall be entitled to recover from the
other party its reasonable attorney’s fees and costs. In the event that any
provision of this Agreement or any other agreement delivered in connection
herewith is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision
of any agreement.
 
(e)   Specific Enforcement, Consent to Jurisdiction. The Company and Subscriber
acknowledge and agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof, this being in addition to any other remedy to which
any of them may be entitled by law or equity. Subject to Section 15(d) hereof,
each of the Company, Subscriber and any signator hereto in his personal capacity
hereby waives, and agrees not to assert in any such suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction in New York of
such court, that the suit, action or proceeding is brought in an inconvenient
forum or that the venue of the suit, action or proceeding is improper. Nothing
in this Section shall affect or limit any right to serve process in any other
manner permitted by law.
 
(f)    Independent Nature of Subscribers.   The Company acknowledges that the
obligations of each Subscriber under the Transaction Documents are several and
not joint with the obligations of any other Subscriber, and no Subscriber shall
be responsible in any way for the performance of the obligations of any other
Subscriber under the Transaction Documents.  The Company acknowledges that the
decision of each Subscriber to purchase Securities has been made by such
Subscriber independently of any other Subscriber and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company which may have been made or
given by any other Subscriber or by any agent or employee of any other
Subscriber, and no Subscriber or any of its agents or employees shall have any
liability to any Subscriber (or any other person) relating to or arising from
any such information, materials, statements or opinions.  The Company
acknowledges that nothing contained in any Transaction Document, and no action
taken by any Subscriber pursuant hereto or thereto (including, but not limited
to, the (i) inclusion of a Subscriber in the Registration Statement and (ii)
review by, and consent to, such Registration Statement by a Subscriber) shall be
deemed to constitute the Subscribers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the
Subscribers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents.  The
Company acknowledges that each Subscriber shall be entitled to independently
protect and enforce its rights, including without limitation, the rights arising
out of the Transaction Documents, and it shall not be necessary for any other
Subscriber to be joined as an additional party in any proceeding for such
purpose.  The Company acknowledges that it has elected to provide all
Subscribers with the same terms and Transaction Documents for the convenience of
the Company and not because Company was required or requested to do so by the
Subscribers.  The Company acknowledges that such procedure with respect to the
Transaction Documents in no way creates a presumption that the Subscribers are
in any way acting in concert or as a group with respect to the Transaction
Documents or the transactions contemplated thereby.

 
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(g)   Consent. As used in the Agreement, and in all other Transaction Documents
as well, “consent of the Subscribers” or similar language means the consent of
holders of not less than 70% of the outstanding Note principal owned by
Subscribers on the date consent is requested, which must specifically include
the express consent of Longview so long as any amount is owed to it under the
Note issued in its favor.

(h)   Equal Treatment. No consideration shall be offered or paid to any person
to amend or consent to a waiver or modification of any provision of the
Transaction Documents or the Prior Transaction Documents unless the same
consideration is also offered and paid to all the parties to the Transaction
Documents and Prior Transaction Documents.

(i)    Force Majeure. Neither party shall be in default or otherwise liable for
any delay in or failure of its performance under this Agreement if such delay or
failure arises solely due to a Force Majeure event. As used herein, “Force
Majeure” shall mean the following acts or omissions provided that they are
beyond the direct control of the Company or a Subscriber, as applicable: an act
of God, an act of war, terrorism, natural disaster or prolonged and systematic
failure of communication or electrical services. Force Majeure shall not include
any act or omission by the Commission or the Trading Market.

(j)    Start Date. For purposes of this Agreement, the start date or
commencement for any relevant period of time shall be deemed to be the Closing
Date unless expressly provided to the contrary herein.

(k)   Designation of Director. The Lieberman Financial Group, Inc. will be
allowed to nominate one (1) additional person to the Company’s Board of
Directors meetings for as long as the Notes remain outstanding. Upon an uncured
Event of Default, The Lieberman Financial Group, Inc., by its consent, shall
have the right to nominate or replace directors such that control of the Board
of Directors is achieved.

 
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SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT
 

Please acknowledge your acceptance of the foregoing Subscription Agreement by
signing and returning a copy to the undersigned whereupon it shall become a
binding agreement between us.

 
OXFORD MEDIA, INC.
 
a Nevada corporation
             
By:_________________________________
 
Name:
 
Title:
     
Dated: November ___, 2006

SUBSCRIBER
PURCHASE PRICE
WARRANTS
MIDSUMMER CAPITAL
295 Madison Avenue, 38th Floor
New York, New York 10017
Tel: 212-624-5031
Fax: 212-624-5040
Attn: Michel Amsalem
ma@MidSummerCapital.com
 
 
 
_______________________________________
(Signature)
**$2,000,000.00**
**2,000,000**

 

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LIST OF EXHIBITS AND SCHEDULES

 
Exhibit A
Form of Note

     

 
Exhibit B
Form of Warrant

     

 
Exhibit C
Payment Instructions

     

 
Exhibit D
Form of Security Agreement

     

 
Exhibit E
Form of Guaranty

     

 
Exhibit F
Form 8-K or Public Announcement

     

 
Exhibit G
Subordination Agreement

     

 
Exhibit H
SVI Financial Statements

     

 
Schedule 7(a)
Subsidiaries

     

 
Schedule 7(d)
Additional Issuances / Capitalization

     

 
Schedule 7(f)(iii)
Re-Set Arrangements

     

 
Schedule 7(f)(iv)
Registration Rights Arrangements

     

 
Schedule 7(q)
Undisclosed Liabilities

     

 
Schedule 7(v)
Transfer Agent

     

 
Schedule 9.1(e)
Use of Proceeds

     

 
Schedule 13.1
Inclusion in Registration Statement

 
 
 
 
 
 
 
 
 
 

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