oxford8k071607ex10-3.htm


    
      

      

    

    
      EXHIBIT
        10.3


      OXFORD
        MEDIA, INC.

      


      CERTIFICATE
        OF DESIGNATION OF PREFERENCES,

      RIGHTS,
        AND LIMITATIONS

      OF

      SERIES
        C CONVERTIBLE PREFERRED STOCK

      


      PURSUANT
        TO SECTION 78.1955 OF THE

      NEVADA
        GENERAL CORPORATION LAW

      


      The
        undersigned, LEWIS JAFFE, does hereby certify that:

      


      1.
        He is
        the President of Oxford Media, Inc., a Nevada corporation (the
“Corporation”).

      


      2.
        The
        Corporation is authorized to issue 1,000,000 shares of preferred stock, 7,857
        of
        which have been issued.

      


      3.
        The
        following resolutions were duly adopted by the board of directors of the
        Corporation (the “Board of Directors”):

      


      WHEREAS,
        the certificate of incorporation of the Corporation provides for a class
        of its
        authorized stock known as preferred stock, comprised of 1,000,000 shares,
        $0.001
        par value per share, issuable from time to time in one or more
        series;

      


      WHEREAS,
        the Board of Directors is authorized to fix the dividend rights, dividend
        rate,
        voting rights, conversion rights, rights and terms of redemption and liquidation
        preferences of any wholly unissued series of preferred stock and the number
        of
        shares constituting any series and the designation thereof, of any of them;
        and

      


      WHEREAS,
        it is the desire of the Board of Directors, pursuant to its authority as
        aforesaid, to fix the rights, preferences, restrictions and other matters
        relating to a series of the preferred stock, which shall consist of up to
        100,000 shares of the preferred stock which the Corporation has the authority
        to
        issue, as follows:

      


      NOW,
        THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide
        for
        the issuance of a series of preferred stock for cash or exchange of other
        securities, rights or property and does hereby fix and determine the rights,
        preferences, restrictions and other matters relating to such series of preferred
        stock as follows:

      


      


      



      
        
          
          

        

        
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      TERMS
        OF PREFERRED STOCK

      


      Section
        1.  Definitions. Capitalized terms used and not otherwise
        defined herein that are defined in the Purchase Agreement shall have the
        meanings given such terms in the Purchase Agreement. For the purposes hereof,
        the following terms shall have the following meanings:

      


      “Alternate
        Consideration” shall have the meaning set forth in Section
        7(e).

      


      “Bankruptcy
        Event” means any of the following events: (a) the Corporation or any
        Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation
        S-X) thereof commences a case or other proceeding under any bankruptcy,
        reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
        insolvency or liquidation or similar law of any jurisdiction relating to
        the
        Corporation or any Significant Subsidiary thereof; (b) there is commenced
        against the Corporation or any Significant Subsidiary thereof any such case
        or
        proceeding that is not dismissed within 60 days after commencement; (c) the
        Corporation or any Significant Subsidiary thereof is adjudicated insolvent
        or
        bankrupt or any order of relief or other order approving any such case or
        proceeding is entered; (d) the Corporation or any Significant Subsidiary
        thereof
        suffers any appointment of any custodian or the like for it or any substantial
        part of its property that is not discharged or stayed within 60 calendar
        days
        after such appointment; (e) the Corporation or any Significant Subsidiary
        thereof makes a general assignment for the benefit of creditors; (f) the
        Corporation or any Significant Subsidiary thereof calls a meeting of its
        creditors with a view to arranging a composition, adjustment or restructuring
        of
        its debts; or (g) the Corporation or any Significant Subsidiary thereof,
        by any
        act or failure to act, expressly indicates its consent to, approval of or
        acquiescence in any of the foregoing or takes any corporate or other action
        for
        the purpose of effecting any of the foregoing.

      


      “Base
        Conversion Price” shall have the meaning set forth in Section
        7(b).

      


      “Business
        Day” means any day except Saturday, Sunday, any day which shall be a federal
        legal holiday in the United States or any day on which banking institutions
        in
        the State of New York are authorized or required by law or other governmental
        action to close.

      


      “Buy-In”
        shall have the meaning set forth in Section 6(e)(iii).

      


      “Change
        of Control Transaction” means the occurrence after the date hereof of any of
        (i) an acquisition after the date hereof by an individual, legal entity or
        “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
        effective control (whether through legal or beneficial ownership of capital
        stock of the Corporation, by contract or otherwise) of in excess of 33% of
        the
        voting securities of the Corporation (other than by means of conversion or
        exercise of the Preferred Stock and the Securities issued or issuable pursuant
        to the Purchase Agreement), or (ii) the Corporation merges into or consolidates
        with any other Person, or any Person merges into or consolidates with the
        Corporation and, after giving effect to such transaction, the stockholders
        of
        the Corporation immediately prior to such transaction own less than 66% of
        the
        aggregate voting power of the Corporation or the successor entity of such
        transaction, or (iii) the Corporation sells or transfers all or substantially
        all of its assets to another Person and the stockholders of the Corporation
        immediately prior to such transaction own less than 66% of the aggregate
        voting
        power of the acquiring entity immediately after the transaction, or (iv)
        a
        replacement at one time or within a one year period of more than one-half
        of the
        members of the Corporation’s board of directors which is not approved by a
        majority of those individuals who are members of the board of directors on
        the
        date hereof (or by those individuals who are serving as members of the board
        of
        directors on any date whose nomination to the board of directors was approved
        by
        a majority of the members of the board of directors who are members on the
        date
        hereof), or (v) the execution by the Corporation of an agreement to which
        the
        Corporation  is a party or by which it is bound, providing for any of
        the events set forth in clauses (i) through (iv) above.

      



      
        
          
          

        

        
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      “Closing
        Date” means the Trading Day when all of the Transaction Documents have been
        executed and delivered by the applicable parties thereto and all conditions
        precedent to (i) each Holder’s obligations to pay the Subscription Amount and
        (ii) the Corporation’s obligations to deliver the Securities have been satisfied
        or waived.

      


      “Commission”
        means the Securities and Exchange Commission.

      


      “Common
        Stock” means the Corporation’s common stock, par value $0.001 per share, and
        stock of any other class of securities into which such securities may hereafter
        be reclassified or changed into.

      


      “Common
        Stock Equivalents” means any securities of the Corporation or the
        Subsidiaries which would entitle the holder thereof to acquire at any time
        Common Stock, including, without limitation, any debt, preferred stock, rights,
        options, warrants or other instrument that is at any time convertible into
        or
        exchangeable for, or otherwise entitles the holder thereof to receive, Common
        Stock.

      


      “Conversion
        Amount” means the sum of the Stated Value at issue.

      


      “Conversion
        Date” shall have the meaning set forth in Section 6(a).

      


      “Conversion
        Price” shall have the meaning set forth in Section 6(b).

      


      “Conversion
        Shares” means, collectively, the shares of Common Stock issuable upon
        conversion of the shares of Preferred Stock in accordance with the terms
        hereof.

      


      “Conversion
        Shares Registration Statement” means a registration statement that registers
        the resale of all Conversion Shares of the Holders, who shall be named as
        a
“selling stockholder” therein and meets the requirements of the Registration
        Rights Agreement.

      
 

      “Dilutive
        Issuance” shall have the meaning set forth in Section 7(b).

      


      “Dilutive
        Issuance Notice” shall have the meaning set forth in Section
        7(b).

      


      “Dividend
        Payment Date” shall have the meaning set forth in Section 3(a).

      
 


      
        
          
          

        

        
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      “Effective
        Date” means the date that the Conversion Shares Registration Statement is
        declared effective by the Commission.

      


      “Equity
        Conditions” means, during the period in question, (i) the Corporation shall
        have duly honored all conversions scheduled to occur or occurring by virtue
        of
        one or more Notices of Conversion of the applicable Holder on or prior to
        the
        dates so requested or required, if any, (ii) the Corporation shall have paid
        all
        liquidated damages and other amounts owing to the applicable Holder in respect
        of the Preferred Stock, (iii) there is an effective Conversion Shares
        Registration Statement pursuant to which the Holders are permitted to utilize
        the prospectus thereunder to resell all of the shares of Common Stock issuable
        pursuant to the Transaction Documents (and the Corporation believes, in good
        faith, that such effectiveness will continue uninterrupted for the foreseeable
        future), (iv) the Common Stock is trading on a Trading Market and all of
        the
        shares issuable pursuant to the Transaction Documents are listed for trading
        on
        such Trading Market (and the Corporation believes, in good faith, that trading
        of the Common Stock on a Trading Market will continue uninterrupted for the
        foreseeable future), (v) there is a sufficient number of authorized, but
        unissued and otherwise unreserved, shares of Common Stock for the issuance
        of
        all of the shares of Common Stock issuable pursuant to the Transaction
        Documents, (vi) there is no existing Triggering Event or no existing event
        which, with the passage of time or the giving of notice, would constitute
        a
        Triggering Event, (vii) the issuance of the shares in question to the applicable
        Holder would not violate the limitations set forth in Section 6(c) and
        Section 6(d) herein, (viii) there has been no public announcement of a pending
        or proposed Fundamental Transaction or Change of Control Transaction that
        has
        not been consummated and (ix) the applicable Holder is not in possession of
        any information that constitutes, or may constitute, material non-public
        information.

      


      “Exchange
        Act” means the Securities Exchange Act of 1934, as amended, and the rules
        and regulations promulgated thereunder.

      


      “Exempt
        Issuance” means the issuance of (a) shares of Common Stock or options
        to employees, officers or directors of the Corporation pursuant to any stock
        or
        option plan duly adopted by a majority of the non-employee members of the
        Board
        of Directors of the Corporation or a majority of the members of a committee
        of
        non-employee directors established for such purpose, (b) securities upon
        the
        exercise 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 the Purchase Agreement, provided
        that such securities have not been amended since the date of the Purchase
        Agreement to increase the number of such securities or to decrease the exercise
        or conversion price of any such securities, and (c) securities issued pursuant
        to acquisitions or strategic transactions approved by a majority of the
        disinterested directors, provided that any such issuance shall only be to
        a
        Person which is, itself or through its subsidiaries, an operating company
        in a
        business synergistic with the business of the Corporation and shall provide
        to
        the Corporation additional benefits in addition to the investment of funds,
        but
        shall not include a transaction in which the Corporation is issuing securities
        primarily for the purpose of raising capital or to an entity whose primary
        business is investing in securities.

       


      
        
          
          

        

        
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      “Forced
        Conversion Amount” means the sum of (i) the aggregate Stated Value then
        outstanding, (ii) accrued but unpaid dividends and (iii) all liquidated damages
        and other amounts due in respect of the Preferred Stock.

      


      “Forced
        Conversion Date” shall have the meaning set forth in Section 8.

      


      “Forced
        Conversion Notice” shall have the meaning set forth in Section
        8.

      


      “Forced
        Conversion Notice Date” shall have the meaning set forth in Section
        8.

      


      “Fundamental
        Transaction” shall have the meaning set forth in Section 7(e).

      


      “Holder”
        shall have the meaning given such term in Section 2.

      


      “Junior
        Securities” means the Common Stock and all other Common Stock Equivalents of
        the Corporation other than those securities which are explicitly senior or
        pari passu to the Preferred Stock in dividend rights or
        liquidation preference.

      


      “Liquidation”
        shall have the meaning set forth in Section 5.

      


      “New
        York Courts” shall have the meaning set forth in Section 11(d).

      


      “Notice
        of Conversion” shall have the meaning set forth in Section
        6(a).

      


      “Original
        Issue Date” means the date of the first issuance of any shares of the
        Preferred Stock regardless of the number of transfers of any particular shares
        of Preferred Stock and regardless of the number of certificates which may
        be
        issued to evidence such Preferred Stock.

      


      “Permitted
        Indebtedness” means (a) the Indebtedness existing on the Original Issue Date
        and set forth on Schedule 3.1(aa) attached to the Purchase Agreement and
        (b) lease obligations and purchase money indebtedness of up to $100,000,
        in the
        aggregate, incurred in connection with the acquisition of capital assets
        and
        lease obligations with respect to newly acquired or leased assets.

      


      “Permitted
        Lien” means the individual and collective reference to the following: (a)
        Liens for taxes, assessments and other governmental charges or levies not
        yet
        due or Liens for taxes, assessments and other governmental charges or levies
        being contested in good faith and by appropriate proceedings for which adequate
        reserves (in the good faith judgment of the management of the Corporation)
        have
        been established in accordance with GAAP; (b) Liens imposed by law which
        were incurred in the ordinary course of the Corporation’s business, such as
        carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and
        other similar Liens arising in the ordinary course of the Corporation’s
        business, and which (x) do not individually or in the aggregate materially
        detract from the value of such property or assets or materially impair the
        use
        thereof in the operation of the business of the Corporation and its consolidated
        Subsidiaries or (y) which are being contested in good faith by appropriate
        proceedings, which proceedings have the effect of preventing for the foreseeable
        future the forfeiture or sale of the property or asset subject to such Lien;
        (c)
        Liens incurred in connection with Permitted Indebtedness under clause (a)
        thereunder; and (d) Liens incurred in connection with Permitted Indebtedness
        under clause (b) thereunder, provided that such Liens are not secured by
        assets
        of the Corporation or its Subsidiaries other than the assets so acquired
        or
        leased.

      



      
        
          
          

        

        
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      "Preferred
        Rights Reduction Date" shall have the meaning set forth in
        Section 3.

      


      “Preferred
        Stock” shall have the meaning set forth in Section 2.

      


      “Purchase
        Agreement” means the Securities Purchase Agreement, dated as of the Original
        Issue Date, to which the Corporation and certain of the original Holders
        are
        parties, as amended, modified or supplemented from time to time in accordance
        with its terms.

      


      “Registration
        Rights Agreement” means the Registration Rights Agreement, dated as of the
        date of the Purchase Agreement, to which the Corporation and the original
        Holder
        are parties, as amended, modified or supplemented from time to time in
        accordance with its terms.

      


      “Securities
        Act” means the Securities Act of 1933, as amended, and the rules and
        regulations promulgated thereunder.

      


      “Share
        Delivery Date” shall have the meaning set forth in Section
        6(e).

      


      “Stated
        Value” shall have the meaning set forth in Section 2.

      


      “Subscription
        Amount” means, as to each Purchaser, the amount in United States Dollars and
        in immediately available funds to be paid for the Preferred Stock purchased
        pursuant to the Purchase Agreement as specified below such Purchaser’s name on
        the signature page of the Purchase Agreement and next to the heading
“Subscription Amount.”

      


      “Subsidiary”
        shall have the meaning set forth in the Purchase Agreement.

      


      “Trading
        Day” means a day on which the principal Trading Market is open for business;
        provided that if the Corporation is not listed or quoted for trading on a
        Trading Market, "Trading Day" shall mean "Business Day" unless the context
        otherwise requires.

      


      “Trading
        Market” means the following markets or exchanges on which the Common Stock
        is listed or quoted for trading on the date in question: the American Stock
        Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
        Global
        Select Market, the New York Stock Exchange or the OTC Bulletin
        Board.

      


      “Transaction
        Documents” shall have the meaning set forth in the Purchase
        Agreement.

      


      “Triggering
        Event” shall have the meaning set forth in Section 9(a).

      



      
        
          
          

        

        
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      “Triggering
        Redemption Amount” means, for each share of Preferred Stock, the sum of (i)
        the greater of (A) 120% of the Stated Value and (B) the product of (a) the
        VWAP
        on the Trading Day immediately preceding the date of the Triggering Event
        and
        (b) the Stated Value divided by the then Conversion Price, (ii) all accrued
        but
        unpaid dividends thereon and (iii) all liquidated damages and other costs,
        expenses or amounts due in respect of the Preferred Stock.

      


      “Triggering
        Redemption Payment Date” shall have the meaning set forth in Section
        9(b).

      


      “VWAP”
        means, for any date, the price determined by the first of the following clauses
        that applies: (a) if the Common Stock is then listed or quoted on a Trading
        Market, the daily volume weighted average price of the Common Stock for such
        date (or the nearest preceding date) on the Trading Market on which the Common
        Stock is then listed or quoted for trading as reported by Bloomberg Financial
        L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02
        p.m.
        (New York City time)); (b) a Trading Market and if prices for the Common
        Stock
        are then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a
        similar organization or agency succeeding to its functions of reporting prices),
        the most recent bid price per share of the Common Stock so reported; or (c)
        in
        all other cases, the fair market value of a share of Common Stock as determined
        by an independent appraiser selected in good faith by the Holders and reasonably
        acceptable to the Corporation, the fees and expenses of which shall be paid
        by
        the Corporation.

      


      Section
        2.  Designation, Amount and Par Value. The series of preferred
        stock shall be designated as its Series C  Convertible Preferred Stock
        (the “Preferred Stock”) and the number of shares so designated
        shall be up to 100,000 (which shall not be subject to increase without the
        written consent of all of the holders of the Preferred Stock (each, a
“Holder” and collectively, the “Holders”)). Each share of
        Preferred Stock shall have a par value of $0.001 per share and a stated value
        equal to $1,000, subject to increase set forth in Section 3(a) below (the
        “Stated Value”).

      
 

      Section
        3.  Dividends in Kind.  Holders shall be entitled to
        receive, and the Corporation shall pay, cumulative dividends at the rate
        per
        share (as a percentage of the Stated Value per share) of 7% per annum (subject
        to increase pursuant to Section 9(b)), payable quarterly on
        January 1, April 1, July 1 and October 1, beginning on the first such date
        after
        the Original Issue Date and on each Conversion Date (with respect only to
        Preferred Stock being converted) (each such date, a “Dividend Payment
        Date”) up to and until the earlier of (y) four (4) year anniversary of
        the first Dividend Payment Date (the “Four Year Anniversary”) and
        (z) the Forced Conversion Date (the earlier of such dates, the
        "Preferred Rights Reduction Date"), in duly authorized, validly issued,
        fully paid and non-assessable shares of Preferred Stock based on the Stated
        Value per share of Preferred Stock of $1,000.  Dividends on the
        Preferred Stock shall be calculated on the basis of a 360-day year, consisting
        of twelve 30 calendar day periods, shall accrue daily commencing on the Original
        Issue Date, and shall be deemed to accrue from such date whether or not earned
        or declared.  Any dividends that are not paid via the issuance of
        shares of Preferred Stock within three Trading Days following a Dividend
        Payment
        Date shall continue to accrue and shall entail a late fee, which must
        be paid in cash, at the rate of 18% per annum or the lesser rate permitted
        by applicable law (such fees to accrue daily, from the Dividend Payment Date
        through and including the date of payment).

      



      
        
          
          

        

        
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      Section
        4.  Voting Rights.  Until such date as Holders holding
        at least 67% of the then outstanding shares of Preferred Stock notify the
        Company in writing that the Preferred Stock shall no longer have voting rights,
        each Holder of Preferred Stock shall have voting rights equal to, as to each
        share of Preferred Stock, the number of Conversion Shares receivable upon
        conversion in full of such share of Preferred Stock then held by such Holder,
        ignoring for such purposes any conversion limitations included
        herein.

      


      Section
        5.  Liquidation. Upon any liquidation, dissolution or
        winding-up of the Corporation, whether voluntary or involuntary (a
“Liquidation”), the Holders shall be entitled to receive out of the
        assets, whether capital or surplus, of the Corporation an amount equal to
        the
        Stated Value, plus any accrued and unpaid dividends thereon and any other
        fees
        or liquidated damages owing thereon, for each share of Preferred Stock before
        any distribution or payment shall be made to the holders of any Junior
        Securities; provided, however, that following the Preferred Rights Reduction
        Date the Holders of the Preferred Stock shall, upon a Liquidation, receive
        any
        distribution of assets pari passu with the holders of Common
        Stock.  If the assets of the Corporation shall be insufficient to pay
        in full such amounts, then the entire assets to be distributed to the Holders
        shall be ratably distributed among the Holders in accordance with the respective
        amounts that would be payable on such shares if all amounts payable thereon
        were
        paid in full.  A Fundamental Transaction or Change of Control
        Transaction shall not be deemed a Liquidation, except that to the extent
        any
        consideration is payable on account of Preferred Stock as a result of a
        Fundamental Transaction or Change of Control Transaction taking place after
        the
        Preferred Rights Reduction Date, all such consideration shall be distributed
        pari passu with the holders of Common Stock. The Corporation shall mail written
        notice of any such Liquidation, not less than 45 days prior to the payment
        date
        stated therein, to each Holder.

      


      Section
        6.   Conversion.

      


      a)           Conversions
        at Option of Holder.  Subject to the limitations set forth in
        Section 6(c) and Section 6(d), each share of Preferred Stock shall be
        convertible, at any time and from time to time from and after the Original
        Issue
        Date at the option of the Holder thereof, into that number of shares of Common
        Stock determined by dividing the Stated Value of such share of Preferred
        Stock
        by the Conversion Price. Holders shall effect conversions under this Section
        6
        by providing the Corporation with the form of conversion notice attached
        hereto
        as Annex A (a “Notice of Conversion”). Each Notice of Conversion
        shall specify the number of shares of Preferred Stock to be converted, the
        number of shares of Preferred Stock owned prior to the conversion at issue,
        the
        number of shares of Preferred Stock owned subsequent to the conversion at
        issue
        and the date on which such conversion is to be effected, which date may not
        be
        prior to the date the applicable Holder delivers by facsimile such Notice
        of
        Conversion to the Corporation (such date, the “Conversion Date”). If no
        Conversion Date is specified in a Notice of Conversion, the Conversion Date
        shall be the date that such Notice of Conversion to the Corporation is deemed
        delivered hereunder. The calculations and entries set forth in the Notice
        of
        Conversion shall control in the absence of manifest or mathematical
        error.  To effect conversions of shares of Preferred Stock, a Holder
        shall not be required to surrender the certificate(s) representing such shares
        of Preferred Stock to the Corporation unless all of the shares of Preferred
        Stock represented thereby are so converted, in which case such Holder shall
        deliver the certificate representing such shares of Preferred Stock promptly
        following the Conversion Date at issue.  Shares of Preferred Stock
        converted into Common Stock or redeemed in accordance with the terms hereof
        shall be canceled and shall not be reissued.

      



      
        
          
          

        

        
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      b)           Automatic
        Conversion. Notwithstanding anything herein to the contrary, upon the Four
        Year Anniversary, as defined in Section 3, above, (such date also being referred
        to herein as the "Automatic Conversion Effective Date"), each share of the
        Preferred Stock then outstanding shall, without further action by the Holder
        thereof, automatically convert into that number of shares of Common Stock
        determined by dividing the Stated Value of such share of Preferred Stock
        by the
        Conversion Price, but only to the extent that such automatic conversion does
        not
        cause such Holder to exceed such Holder’s Beneficial Ownership Limitation. After
        the Automatic Conversion Effective Date, conversion of shares of Preferred
        Stock
        shall be at the sole election of the Holder and the redemption, liquidation,
        consent, dividend, and other rights and preferences of Holders of the Preferred
        Shares (other than voting rights, which shall not be effected by the automatic
        conversion) shall be eliminated or limited as specifically set forth
        herein.

      


      c)           Conversion
        Price.  The conversion price for the Preferred Stock shall equal
$0.02,subject to adjustment herein (the
        “Conversion Price”).

      


      d)           Beneficial
        Ownership Limitation. The Corporation shall not effect any
        conversion of the Preferred Stock, including an automatic conversion under
        Subsection b), above, or a forced conversion under Section 8, below, and
        a
        Holder shall not have the right to convert any portion of the Preferred Stock,
        to the extent that, after giving effect to the conversion set forth on the
        applicable Notice of Conversion, such Holder (together with such Holder’s
        Affiliates, and any other person or entity acting as a group together with
        such
        Holder or any of such Holder’s Affiliates) would beneficially own in excess of
        the Beneficial Ownership Limitation (as defined below).  For purposes
        of the foregoing sentence, the number of shares of Common Stock beneficially
        owned by such Holder and its Affiliates shall include the number of shares
        of
        Common Stock issuable upon conversion of the Preferred Stock with respect
        to
        which such determination is being made, but shall exclude the number of shares
        of Common Stock which are issuable upon (A) conversion of the remaining,
        unconverted Stated Value of Preferred Stock beneficially owned by such Holder
        or
        any of its Affiliates and (B) exercise or conversion of the unexercised or
        unconverted portion of any other securities of the
        Corporation  subject to a limitation on conversion or exercise
        analogous to the limitation contained herein beneficially owned by such Holder
        or any of its Affiliates.  Except as set forth in the preceding
        sentence, for purposes of this Section 6(c), beneficial ownership shall be
        calculated in accordance with Section 13(d) of the Exchange Act and the rules
        and regulations promulgated thereunder.  To the extent that the
        limitation contained in this Section 6(c) applies, the determination of whether
        the Preferred Stock is convertible (in relation to other securities owned
        by
        such Holder together with any Affiliates) and of how many shares of Preferred
        Stock are convertible shall be in the sole discretion of such Holder, and
        the
        submission of a Notice of Conversion shall be deemed to be such Holder’s
        determination of whether the shares of Preferred Stock may be converted (in
        relation to other securities owned by such Holder together with any Affiliates)
        and how many shares of the Preferred Stock are convertible, in each case
        subject
        to the Beneficial Ownership Limitation. To ensure compliance with this
        restriction, each Holder will be deemed to represent to the Corporation each
        time it delivers a Notice of Conversion that such Notice of Conversion has
        not
        violated the restrictions set forth in this paragraph and the Corporation
        shall
        have no obligation to verify or confirm the accuracy of such
        determination.  In addition, a determination as to any group status as
        contemplated above shall be determined in accordance with Section 13(d) of
        the
        Exchange Act and the rules and regulations promulgated thereunder. For purposes
        of this Section 6(c), in determining the number of outstanding shares of
        Common
        Stock, a Holder may rely on the number of outstanding shares of Common Stock
        as
        stated in the most recent of the following: (A) the Corporation’s most recent
        Form 10-QSB or Form 10-KSB, as the case may be, (B) a more recent public
        announcement by the Corporation or (C) a more recent notice by the Corporation
        or the Corporation’s transfer agent setting forth the number of shares of Common
        Stock outstanding.  Upon the written or oral request of a Holder, the
        Corporation shall within two Trading Days confirm orally and in writing to
        such
        Holder the number of shares of Common Stock then outstanding.  In any
        case, the number of outstanding shares of Common Stock shall be determined
        after
        giving effect to the conversion or exercise of securities of the Corporation,
        including the Preferred Stock, by such Holder or its Affiliates since the
        date
        as of which such number of outstanding shares of Common Stock was reported.
        The
“Beneficial Ownership Limitation” shall be 9.99% of the number of shares
        of the Common Stock outstanding immediately after giving effect to the issuance
        of shares of Common Stock issuable upon conversion of Preferred Stock held
        by
        the applicable Holder.  The provisions of this paragraph shall be
        construed and implemented in a manner otherwise than in strict conformity
        with the terms of this Section 6(c) to correct this paragraph (or any
        portion hereof) which may be defective or inconsistent with the intended
        Beneficial Ownership Limitation herein contained or to make changes or
        supplements necessary or desirable to properly give effect to such
        limitation. The limitations contained in this paragraph shall apply to a
        successor holder of Preferred Stock.

      



      
        
          
          

        

        
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      e)           Issuance
        Limitations.  Notwithstanding anything herein to the contrary, if
        the Corporation has not approved an Authorized Share Reverse Action, then
        the
        Corporation may not issue, upon conversion of the Preferred Stock pursuant
        to
        this Section 6, a number of shares of Common Stock which would in the aggregate
        exceed 51,204,843 shares of Common Stock (such number of shares, the
“Issuable Maximum”).  In such case, any Holder exercising its
        conversion rights pursuant to this Section 6 shall be entitled to a portion
        of
        the Issuable Maximum equal to the quotient obtained by dividing (x) the original
        Stated Value of such Holder’s Preferred Stock by (y) the aggregate Stated Value
        of all Preferred Stock issued on the Original Issue Date to all
        Holders.

      


      
        	
                 

              	
                f)

              	
                Mechanics
                  of Conversion

              


      

      


      i.           Delivery
        of Certificate Upon Conversion. Not later than three Trading Days after each
        Conversion Date (the “Share Delivery Date”), the Corporation shall
        deliver, or cause to be delivered, to the converting Holder a certificate
        or
        certificates which, on or after the Effective Date, shall be free of restrictive
        legends and trading restrictions (other than those which may then be required
        by
        the Purchase Agreement) representing the number of Conversion Shares being
        acquired upon the conversion of shares of Preferred Stock. On or after the
        Effective Date, the Corporation shall, upon request of such Holder, use its
        best
        efforts to deliver any certificate or certificates required to be delivered
        by
        the Corporation under Section 6 or Section 8 hereof electronically through
        the
        Depository Trust Company or another established clearing corporation performing
        similar functions. If in the case of any Notice of Conversion such certificate
        or certificates are not delivered to or as directed by the applicable Holder
        by
        the third Trading Day after the Conversion Date, the applicable Holder shall
        be
        entitled to elect to rescind such Conversion Notice by written notice to
        the
        Corporation at any time on or before its receipt of such certificate or
        certificates, in which event the Corporation shall promptly return to such
        Holder any original Preferred Stock certificate delivered to the Corporation
        and
        such Holder shall promptly return to the Corporation any Common Stock
        certificates representing the shares of Preferred Stock unsuccessfully tendered
        for conversion to the Corporation.

      
 

      


      


      


      



      
        
          
          

        

        
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      ii.           Obligation
        Absolute; Partial Liquidated Damages. The Corporation’s obligation to
        issue and deliver the Conversion Shares upon conversion of Preferred Stock
        in
        accordance with the terms hereof are absolute and unconditional, irrespective
        of
        any action or inaction by a Holder to enforce the same, any waiver or consent
        with respect to any provision hereof, the recovery of any judgment against
        any
        Person or any action to enforce the same, or any setoff, counterclaim,
        recoupment, limitation or termination, or any breach or alleged breach by
        such
        Holder or any other Person of any obligation to the Corporation or any violation
        or alleged violation of law by such Holder or any other person, and irrespective
        of any other circumstance which might otherwise limit such obligation of
        the
        Corporation to such Holder in connection with the issuance of such Conversion
        Shares; provided, however, that such delivery shall not operate as
        a waiver by the Corporation of any such action that the Corporation may have
        against such Holder.  In the event a Holder shall elect to convert any
        or all of the Stated Value of its Preferred Stock, the Corporation may not
        refuse conversion based on any claim that such Holder or any one associated
        or
        affiliated with such Holder has been engaged in any violation of law, agreement
        or for any other reason, unless an injunction from a court, on notice to
        Holder,
        restraining and/or enjoining conversion of all or part of the Preferred Stock
        of
        such Holder shall have been sought and obtained, and the Corporation posts
        a
        surety bond for the benefit of such Holder in the amount of 150% of the Stated
        Value of Preferred Stock which is subject to the injunction, which bond shall
        remain in effect until the completion of arbitration/litigation of the
        underlying dispute and the proceeds of which shall be payable to such Holder
        to
        the extent it obtains judgment.  In the absence of such injunction,
        the Corporation shall issue Conversion Shares and, if applicable, cash, upon
        a
        properly noticed conversion. If the Corporation fails to deliver to a Holder
        such certificate or certificates pursuant to Section 6(e)(i) on the second
        Trading Day after the Share Delivery Date applicable to such conversion,
        the
        Corporation shall pay to such Holder, in cash, as liquidated damages and
        not as
        a penalty, for each $1,000 of Stated Value of Preferred Stock being converted,
        $5 per Trading Day (increasing to $10 per Trading Day on the third Trading
        Day
        and increasing to $20 per Trading Day on the sixth Trading Day after such
        damages begin to accrue) for each Trading Day after such second Trading Day
        after the Share Delivery Date until such certificates are delivered. Nothing
        in
        this Section 6(3)(ii) shall limit a Holder’s right to pursue actual damages or
        declare a Triggering Event pursuant to Section 9 for the Corporation’s failure
        to deliver Conversion Shares within the period specified herein and such
        Holder
        shall have the right to pursue all remedies available to it hereunder, at
        law or
        in equity including, without limitation, a decree of specific performance
        and/or
        injunctive relief.  The Exercise of any such rights shall not
        prohibit a Holder from seeking to enforce damages pursuant to any other Section
        hereof or under applicable law.

      
 

      


      


      



      
        
          
          

        

        
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      iii.          Compensation
        for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. If the
        Corporation fails to deliver to a Holder the applicable certificate or
        certificates by the Share Delivery Date pursuant to Section 6(e)(i), and
        if
        after such Share Delivery Date such Holder is required by its brokerage firm
        to
        purchase (in an open market transaction or otherwise), or the Holder’s
        brokerage firm purchases, shares of Common Stock to deliver in satisfaction
        of a
        sale by such Holder of the Conversion Shares which such Holder was entitled
        to
        receive upon the conversion relating to such Share Delivery Date
        (a “Buy-In”), then the Corporation shall (A) pay in cash to such
        Holder (in addition to any other remedies available to or elected by such
        Holder) the amount by which (x) such Holder’s total purchase price (including
        any brokerage commissions) for the shares of Common Stock so purchased exceeds
        (y) the product of (1) the aggregate number of shares of Common Stock that
        such
        Holder was entitled to receive from the conversion at issue multiplied by
        (2)
        the actual sale price at which the sell order giving rise to such purchase
        obligation was executed (including any brokerage commissions) and (B) at
        the
        option of such Holder, either reissue (if surrendered) the shares of Preferred
        Stock equal to the number of shares of Preferred Stock submitted for conversion
        or deliver to such Holder the number of shares of Common Stock that would
        have
        been issued if the Corporation had timely complied with its delivery
        requirements under Section 6(e)(i). For example, if a Holder purchases shares
        of
        Common Stock having a total purchase price of $11,000 to cover a Buy-In with
        respect to an attempted conversion of shares of Preferred Stock with respect
        to
        which the actual sale price (including any brokerage commissions) giving
        rise to
        such purchase obligation was a total of $10,000 under clause (A) of the
        immediately preceding sentence, the Corporation shall be required to pay
        such
        Holder $1,000. The Holder shall provide the Corporation written notice
        indicating the amounts payable to such Holder in respect of the Buy-In and,
        upon
        request of the Corporation, evidence of the amount of such loss. Nothing
        herein
        shall limit a Holder’s right to pursue any other remedies available to it
        hereunder, at law or in equity including, without limitation, a decree of
        specific performance and/or injunctive relief with respect to the Corporation’s
        failure to timely deliver certificates representing shares of Common Stock
        upon
        conversion of the shares of Preferred Stock as required pursuant to the terms
        hereof.

      
 

      


      


      


      



      
        
          
          

        

        
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      iv.           Reservation
        of Shares Issuable Upon Conversion. Until an Authorized Share Reverse
        Action, the Corporation covenants that it will at all times reserve and keep
        available out of its authorized and unissued shares of Common Stock for the
        sole
        purpose of issuance upon conversion of the Preferred Stock, free from preemptive
        rights or any other actual contingent purchase rights of Persons other than
        the
        Holders of the Preferred Stock, an amount equal to the Issuable Maximum.
        Following an Authorized Share Reverse Action, the Corporation covenants that
        it
        will at all times reserve and keep available out of its authorized and unissued
        shares of Common Stock for the sole purpose of issuance upon conversion of
        the
        Preferred Stock, free from preemptive rights or any other actual contingent
        purchase rights of Persons other than the Holders of the Preferred Stock,
        not
        less than such aggregate number of shares of the Common Stock as shall (subject
        to the terms and conditions in the Purchase Agreement) be issuable (taking
        into
        account the adjustments of Section 7) upon the conversion of all
        outstanding shares of Preferred Stock.  The Corporation covenants that
        all shares of Common Stock that shall be so issuable shall, upon issue, be
        duly
        authorized, validly issued, fully paid and nonassessable and, if the Conversion
        Shares Registration Statement is then effective under the Securities Act,
        shall
        be registered for public sale in accordance with such Conversion Shares
        Registration Statement.

      


      v.           Fractional
        Shares. No fractional shares or scrip representing fractional shares shall
        be issued upon the conversion of the Preferred Stock.   As to any
        fraction of a share which a Holder would otherwise be entitled to purchase
        upon
        such conversion, the Corporation shall at its election, either pay a cash
        adjustment in respect of such final fraction in an amount equal to such fraction
        multiplied by the Conversion Price or round up to the next whole
        share.

      


      vi.           Transfer
        Taxes.  The issuance of certificates for shares of the Common
        Stock on conversion of this Preferred Stock shall be made without charge
        to any
        Holder for any documentary stamp or similar taxes that may be payable in
        respect
        of the issue or delivery of such certificates, provided that the Corporation
        shall not be required to pay any tax that may be payable in respect of any
        transfer involved in the issuance and delivery of any such certificate upon
        conversion in a name other than that of the Holders of such shares of Preferred
        Stock and the Corporation shall not be required to issue or deliver such
        certificates unless or until the Person or Persons requesting the issuance
        thereof shall have paid to the Corporation the amount of such tax or shall
        have
        established to the satisfaction of the Corporation that such tax has been
        paid.

      


      Section
        7.  Certain Adjustments.

      


      a)           Stock
        Dividends and Stock Splits.  If the Corporation, at any
        time while this Preferred Stock is outstanding: (A) pays a stock dividend
        or
        otherwise makes a distribution or distributions payable in shares of Common
        Stock on shares of Common Stock or any other Common Stock Equivalents (which,
        for avoidance of doubt, shall not include any shares of Common Stock issued
        by
        the Corporation upon conversion of, or payment of a dividend on, this Preferred
        Stock); (B) subdivides outstanding shares of Common Stock into a larger number
        of shares; (C) combines (including by way of a reverse stock split) outstanding
        shares of Common Stock into a smaller number of shares; or (D) issues, in
        the
        event of a reclassification of shares of the Common Stock, any shares of
        capital
        stock of the Corporation, then the Conversion Price shall be multiplied by
        a
        fraction of which the numerator shall be the number of shares of Common Stock
        (excluding any treasury shares of the Corporation) outstanding immediately
        before such event and of which the denominator shall be the number of shares
        of
        Common Stock outstanding immediately after such event.  Any adjustment
        made pursuant to this Section 7(a) shall become effective immediately after
        the
        record date for the determination of stockholders entitled to receive such
        dividend or distribution and shall become effective immediately after the
        effective date in the case of a subdivision, combination or
        re-classification.

      



      
        
          
          

        

        
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      b)           Subsequent
        Equity Sales.  If, at any time prior to the Preferred Rights
        Reduction Date,  the Corporation or any Subsidiary sells or grants any
        option to purchase or sells or grants any right to reprice its securities,
        or
        otherwise disposes of or issues (or announces any sale, grant or any option
        to
        purchase or other disposition) any Common Stock or Common Stock Equivalents
        entitling any Person to acquire shares of Common Stock at an effective price
        per
        share that is lower than the then Conversion Price (such lower price, the
        “Base Conversion Price” and such issuances collectively, a “Dilutive
        Issuance”) (if the holder of the Common Stock or Common Stock
        Equivalents so issued shall at any time, whether by operation of purchase
        price
        adjustments, reset provisions, floating conversion, exercise or exchange
        prices
        or otherwise, or due to warrants, options or rights per share which are issued
        in connection with such issuance, be entitled to receive shares of Common
        Stock
        at an effective price per share that is lower than the Conversion Price,
        such
        issuance shall be deemed to have occurred for less than the Conversion Price
        on
        such date of the Dilutive Issuance), then the Conversion Price shall be reduced
        to equal the Base Conversion Price.  Notwithstanding the foregoing, no
        adjustment will be made under this Section 7(b) in respect of an Exempt Issuance
        or with respect to any Dilutive Issuance occurring after the Preferred Rights
        Reduction Date.  If the Corporation enters into a Variable Rate
        Transaction, despite the prohibition set forth in the Purchase Agreement,
        the
        Corporation shall be deemed to have issued Common Stock or Common Stock
        Equivalents at the lowest possible conversion price at which such securities
        may
        be converted or exercised.  The Corporation shall notify the Holders
        in writing, no later than the Business Day following the issuance of any
        Common
        Stock or Common Stock Equivalents subject to this Section 7(b), indicating
        therein the applicable issuance price, or applicable reset price, exchange
        price, conversion price and other pricing terms (such notice, the “Dilutive
        Issuance Notice”). For purposes of clarification, whether or not the
        Corporation provides a Dilutive Issuance Notice pursuant to this Section
        7(b),
        upon the occurrence of any Dilutive Issuance, the Holders are entitled to
        receive a number of Conversion Shares based upon the Base Conversion Price
        on or
        after the date of such Dilutive Issuance, regardless of whether a Holder
        accurately refers to the Base Conversion Price in the Notice of Conversion.
        The
        provisions of this Section 7(b) shall terminate on the Preferred Rights
        Reduction Date and shall not thereafter be available to any Holder.

      
 

      


      



      
        
          
          

        

        
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      c)           Subsequent
        Rights Offerings.  If the Corporation, at any time prior to
        the Preferred Rights Reduction Date, shall issue rights, options or warrants
        to
        all holders of Common Stock (and not to Holders) entitling them to subscribe
        for
        or purchase shares of Common Stock at a price per share that is lower than
        the
        VWAP on the record date referenced below, then the Conversion Price shall
        be
        multiplied by a fraction of which the denominator shall be the number of
        shares of the Common Stock outstanding on the date of issuance of such rights
        or
        warrants plus the number of additional shares of Common Stock offered for
        subscription or purchase, and of which the numerator shall be the number
        of
        shares of the Common Stock outstanding on the date of issuance of such rights
        or
        warrants plus the number of shares which the aggregate offering price of
        the
        total number of shares so offered (assuming delivery to the Corporation in
        full
        of all consideration payable upon exercise of such rights, options or warrants)
        would purchase at such VWAP.  Such adjustment shall be made whenever
        such rights or warrants are issued prior to the Preferred Rights Reduction
        Date,
        and shall become effective immediately after the record date for the
        determination of stockholders entitled to receive such rights, options or
        warrants.  The provisions of this Section 7(c) shall terminate on
        the Preferred Rights Reduction Date and shall not thereafter be available
        to any
        Holder.

       

      d)           Pro
        Rata Distributions. If the Corporation, at any time prior to the
        Preferred Rights Reduction Date, distributes to all holders of Common Stock
        (and
        not to Holders) evidences of its indebtedness or assets (including cash and
        cash
        dividends) or rights or warrants to subscribe for or purchase any security
        (other than Common Stock, which shall be subject to Section 7(b)), then in
        each
        such case the Conversion Price shall be adjusted by multiplying such Conversion
        Price in effect immediately prior to the record date fixed for determination
        of
        stockholders entitled to receive such distribution by a fraction of which
        the
        denominator shall be the VWAP determined as of the record date mentioned
        above,
        and of which the numerator shall be such VWAP on such record date less the
        then
        fair market value at such record date of the portion of such assets, evidence
        of
        indebtedness or rights or warrants so distributed applicable to one outstanding
        share of the Common Stock as determined by the Board of Directors of the
        Corporation in good faith. In either case the adjustments shall be described
        in
        a statement delivered to the Holders describing the portion of assets or
        evidences of indebtedness so distributed or such subscription rights applicable
        to one share of Common Stock. Such adjustment shall be made whenever any
        such
        distribution is made prior to the Preferred Rights Reduction Date and shall
        become effective immediately after the record date mentioned
        above.    The provisions of this Section 7(d) shall
        terminate on the Preferred Rights Reduction Date and shall not thereafter
        be
        available to any Holder.

      


      e)           Fundamental
        Transaction. If, at any time while this Preferred Stock is outstanding, (A)
        the Corporation effects any merger or consolidation of the Corporation with
        or
        into another Person, (B) the Corporation effects any sale of all or
        substantially all of its assets in one transaction or a series of related
        transactions, (C) any tender offer or exchange offer (whether by the Corporation
        or another Person) is completed pursuant to which holders of Common Stock
        are
        permitted to tender or exchange their shares for other securities, cash or
        property, or (D) the Corporation effects any reclassification of the Common
        Stock or any compulsory share exchange pursuant to which the Common Stock
        is
        effectively converted into or exchanged for other securities, cash or property
        (in any such case, a “Fundamental Transaction”), then, upon any
        subsequent conversion of this Preferred Stock, the Holders shall have the
        right
        to receive, for each Conversion Share that would have been issuable upon
        such
        conversion immediately prior to the occurrence of such Fundamental Transaction,
        the same kind and amount of securities, cash or property as it would have
        been
        entitled to receive upon the occurrence of such Fundamental Transaction if
        it
        had been, immediately prior to such Fundamental Transaction, the holder of
        one
        share of Common Stock (the “Alternate Consideration”).  For
        purposes of any such conversion, the determination of the Conversion Price
        shall
        be appropriately adjusted to apply to such Alternate Consideration based
        on the
        amount of Alternate Consideration issuable in respect of one share of Common
        Stock in such Fundamental Transaction, and the Corporation shall apportion
        the
        Conversion Price among the Alternate Consideration in a reasonable manner
        reflecting the relative value of any different components of the Alternate
        Consideration.  If holders of Common Stock are given any choice as to
        the securities, cash or property to be received in a Fundamental Transaction,
        then the Holders shall be given the same choice as to the Alternate
        Consideration it receives upon any conversion of this Preferred Stock following
        such Fundamental Transaction.  To the extent necessary to effectuate
        the foregoing provisions, any successor to the Corporation or surviving entity
        in such Fundamental Transaction shall file a new Certificate of Designation
        with
        the same terms and conditions and issue to the Holders new preferred stock
        consistent with the foregoing provisions and evidencing the Holders’ right to
        convert such preferred stock into Alternate Consideration. The terms of any
        agreement pursuant to which a Fundamental Transaction is effected shall include
        terms requiring any such successor or surviving entity to comply with the
        provisions of this Section 7(e) and insuring that this Preferred Stock (or
        any
        such replacement security) will be similarly adjusted upon any subsequent
        transaction analogous to a Fundamental Transaction.

      


      



      
        
          
          

        

        
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      f)       
            Calculations.  All calculations under
        this Section 7 shall be made to the nearest cent or the nearest 1/100th of
        a
        share, as the case may be.  For purposes of this Section 7, the number
        of shares of Common Stock deemed to be issued and outstanding as of a given
        date
        shall be the sum of the number of shares of Common Stock (excluding any treasury
        shares of the Corporation) issued and outstanding.

      


      g)           Notice
        to the Holders.

      


      i.           Adjustment
        to Conversion Price.  Whenever the Conversion Price is adjusted
        pursuant to any provision of this Section 7, the Corporation shall promptly
        deliver to each Holder a notice setting forth the Conversion Price after
        such
        adjustment and setting forth a brief statement of the facts requiring such
        adjustment.

      
 

      ii.           Notice
        to Allow Conversion by Holder.  If (A) the Corporation shall
        declare a dividend (or any other distribution in whatever form) on the Common
        Stock, (B) the Corporation shall declare a special nonrecurring cash dividend
        on
        or a redemption of the Common Stock, (C) the Corporation shall authorize
        the
        granting to all holders of the Common Stock of rights or warrants to subscribe
        for or purchase any shares of capital stock of any class or of any rights,
        (D)
        the approval of any stockholders of the Corporation shall be required in
        connection with any reclassification of the Common Stock, any consolidation
        or
        merger to which the Corporation is a party, any sale or transfer of all or
        substantially all of the assets of the Corporation, of any compulsory share
        exchange whereby the Common Stock is converted into other securities, cash
        or
        property or (E) the Corporation shall authorize the voluntary or involuntary
        dissolution, liquidation or winding up of the affairs of the Corporation,
        then,
        in each case, the Corporation shall cause to be filed at each office or agency
        maintained for the purpose of conversion of this Preferred Stock, and shall
        cause to be delivered to each Holder at its last address as it shall appear
        upon
        the stock books of the Corporation, at least 20 calendar days prior to the
        applicable record or effective date hereinafter specified, a notice stating
        (x)
        the date on which a record is to be taken for the purpose of such dividend,
        distribution, redemption, rights or warrants, or if a record is not to be
        taken,
        the date as of which the holders of the Common Stock of record to be
        entitled to such dividend, distributions, redemption, rights or warrants
        are to
        be determined or (y) the date on which such reclassification, consolidation,
        merger, sale, transfer or share exchange is expected to become effective
        or
        close, and the date as of which it is expected that holders of the Common
        Stock of record shall be entitled to exchange their shares of the Common
        Stock
        for securities, cash or other property deliverable upon such reclassification,
        consolidation, merger, sale, transfer or share exchange, provided that the
        failure to deliver such notice or any defect therein or in the delivery thereof
        shall not affect the validity of the corporate action required to be specified
        in such notice.  The Holder is entitled to convert the Conversion
        Amount of this Preferred Stock (or any part hereof) during the 20-day period
        commencing on the date of such notice through the effective date of the event
        triggering such notice.

      
 


      
        
          
          

        

        
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      Section
        8. Forced Conversion.  Notwithstanding anything herein
        to the contrary, if after the Effective Date (i) the VWAP for each of any
        22
        consecutive Trading Day period, which 22 consecutive Trading Day period shall
        have commenced only after the later of the Shareholder Approval Date and
        the
        Effective Date (“Threshold Period”), exceeds $0.05, subject to adjustment for
        reverse and forward stock splits, stock dividends, stock combinations and
        other
        similar transactions of the Common Stock that occur after the Original Issue
        Date and (ii) the volume for each Trading Day during any Threshold Period
        exceeds that number of shares of Common Stock, per Trading Day, which is
        one
        percent (1%)  of then issued and outstanding shares of Common Stock, the
        Corporation may, within 1 Trading Day after the end of any such Threshold
        Period, deliver a written notice to all Holders (a “Forced Conversion Notice”
and the date such notice is delivered to all Holders, the “Forced Conversion
        Notice Date”) to cause each Holder to convert all or part of such Holder’s
        Preferred Stock (as specified in such Forced Conversion Notice) plus all
        accrued
        but unpaid dividends thereon and all liquidated damages and other amounts
        due in
        respect of the Preferred Stock pursuant to Section 6, it being agreed that
        the
“Conversion Date” for purposes of Section 6 shall be deemed to occur on the
        third Trading Day following the Forced Conversion Notice Date (such third
        Trading Day, the “Forced Conversion Date”).  The Corporation may not
        deliver a Forced Conversion Notice, and any Forced Conversion Notice delivered
        by the Corporation shall not be effective, unless all of the Equity Conditions
        have been met on each Trading Day during the applicable Threshold Period
        through
        and including the later of the Forced Conversion Date and the Trading Day
        after
        the date that the Conversion Shares issuable pursuant to such conversion
        are
        actually delivered to the Holders pursuant to the Forced Conversion
        Notice.   Any Forced Conversion Notices shall be applied ratably
        to all of the Holders based on each Holder’s initial purchases of Preferred
        Stock hereunder, provided that any voluntary conversions by a Holder shall
        be
        applied against such Holder’s pro rata allocation, thereby decreasing the
        aggregate amount forcibly converted hereunder if less than all shares of
        the
        Preferred Stock are forcibly converted.  For purposes of
        clarification, a Forced Conversion shall be subject to all of the provisions
        of
        Section 6, including, without limitation, the provisions (i) requiring payment
        of liquidated damages and limitations on conversions; (ii) prohibiting a
        conversion of any portion of the Preferred Stock, to the extent that, after
        giving effect to the conversion, such Holder (together with such Holder’s
        Affiliates, and any other person or entity acting as a group together with
        such
        Holder or any of such Holder’s Affiliates) would beneficially own in excess of
        the Beneficial Ownership Limitation; and, (iii) dictating that the redemption,
        liquidation, consent, dividend, and other rights and preferences of Holders
        of
        the Preferred Shares (other than voting rights, which shall not be affected
        by
        the automatic conversion) shall be eliminated or limited as specifically
        set
        forth herein upon a conversion up to the Holder’s Beneficial Ownership
        Limitation.

      


      


      


      



      
        
          
          

        

        
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      Section
        9. Redemption Upon Triggering Events.

      
 

      a)           “Triggering
        Event” means any one or more of the following events (whatever the reason
        and whether it shall be voluntary or involuntary or effected by operation
        of law
        or pursuant to any judgment, decree or order of any court, or any order,
        rule or
        regulation of any administrative or governmental body):

      


      i.            the
        failure of the initial Conversion Shares Registration Statement to be declared
        effective by the Commission on or prior to the 180th day after
        the
        Original Issue Date; provided that to the extent that SEC Guidance (as defined
        in the Registration Rights Agreement) does not permit the registration of
        all or
        part of the Initial Shares (as defined in the Registration Rights Agreement),
        such failure shall not be a Triggering Event hereunder;

      
 

      ii.           if,
        during the Effectiveness Period, the effectiveness of the Conversion Shares
        Registration Statement lapses for more than an aggregate of 60 calendar days
        (which need not be consecutive calendar days) during any 12 month period,
        or the
        Holders shall not otherwise be permitted to resell Registrable Securities
        under
        the Conversion Shares Registration Statement for more than an aggregate of
        60
        calendar days (which need not be consecutive calendar days) during any 12
        month
        period;

      


      iii.           the
        Corporation shall fail to deliver certificates representing Conversion Shares
        issuable upon a conversion hereunder that comply with the provisions hereof
        prior to the fifth Trading Day after such shares are required to be delivered
        hereunder, or the Corporation shall provide written notice to any Holder,
        including by way of public announcement, at any time, of its intention not
        to
        comply with requests for conversion of any shares of Preferred Stock in
        accordance with the terms hereof;

      


      iv.          one
        of the Events (as defined in the Registration Rights Agreement) described
        in
        subsections (i), (ii) or (iii) of Section 2(b) of the Registration Rights
        Agreement shall not have been cured to the satisfaction of the Holders prior
        to
        the expiration of 30 calendar days from the Event Date (as defined in the
        Registration Rights Agreement) relating thereto (other than an Event resulting
        from a failure of a Conversion Shares Registration Statement to be declared
        effective by the Commission on or prior to the 180th day after the Original
        Issue Date, which shall be covered by Section 9(a)(i));

      


      


      



      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      


      v.           the
        Corporation shall fail for any reason to pay in full the amount of cash due
        pursuant to a Buy-In within five calendar days after notice therefor is
        delivered hereunder or shall fail to pay all amounts owed on account of any
        Event (as defined in the Registration Rights Agreement) within five days
        of the
        date due;

      


      vi.          the
        Corporation shall fail to have available a sufficient number of authorized
        and
        unreserved shares of Common Stock to issue to such Holder upon a conversion
        hereunder;

      


      vii.         unless
        specifically addressed elsewhere in this Certificate of Designation as a
        Triggering Event, the Corporation shall fail to observe or perform any other
        covenant, agreement or warranty contained in, or otherwise commit any breach
        of
        the Transaction Documents, and such failure or breach shall not, if subject
        to
        the possibility of a cure by the Corporation, have been cured within 30 calendar
        days after the date on which written notice of such failure or breach shall
        have
        been delivered;

      


      viii.        the
        Corporation shall redeem more than a de minimis number
        of  Junior Securities other than as to repurchases of Common Stock or
        Common Stock Equivalents from departing officers and directors of the
        Corporation, provided that, while any of the Preferred Stock remains
        outstanding, such repurchases shall not exceed an aggregate of $100,000 from
        all
        officers and directors;

      


      ix.          the
        Corporation shall be party to a Change of Control Transaction;

      


      x.           there
        shall have occurred a Bankruptcy Event;

      


      xi.          the
        Common Stock shall fail to be listed or quoted for trading on a Trading Market
        for more than five Trading Days, which need not be consecutive Trading Days;
        or

      


      xii.         any
        monetary judgment, writ or similar final process shall be entered or filed
        against the Corporation, any subsidiary or any of their respective property
        or
        other assets for greater than $100,000, and such judgment, writ or similar
        final
        process shall remain unvacated, unbonded or unstayed for a period of 45 calendar
        days.

      


      b)           If
        a Triggering Event occurs prior to the Preferred Rights Reduction Date, each
        Holder shall (in addition to all other rights it may have hereunder or under
        applicable law) have the right, exercisable at the sole option of such Holder,
        to require the Corporation to either (i) redeem all of the Preferred Stock
        then
        held by such Holder for a redemption price, in shares of Common Stock, equal
        to
        a number of shares of Common Stock equal to the Triggering Redemption Amount
        divided by 75% of the average of the 10 VWAPs immediately prior to the date
        of
        election hereunder or (b) increase the dividend rate on all of the outstanding
        Preferred Stock held by such Holder to 18% per annum thereafter.  The
        Triggering Redemption Amount, if in shares, shall be issued within five Trading
        Days of the date on which the notice for the payment therefor is provided
        by a
        Holder (the “Triggering Redemption Payment Date”).  If the
        Corporation fails to pay in full the Triggering Redemption Amount hereunder
        on
        the date such amount is due in accordance with this Section, the Corporation
        will pay interest thereon at a rate equal to the lesser of 18% per annum
        or the
        maximum rate permitted by applicable law, accruing daily from such date until
        the Triggering Redemption Amount, plus all such interest thereon, is paid
        in
        full.  For purposes of this Section, a share of Preferred Stock is
        outstanding until such date as the applicable Holder shall have received
        Conversion Shares upon a conversion (or attempted conversion) thereof that
        meets
        the requirements hereof or has been paid the Triggering Redemption Amount
        as set
        forth herein.    The redemption rights set forth in this
        Section 9 shall terminate on the Preferred Rights Reduction Date and shall
        not thereafter apply to any Holder.

      



      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      


      Section
        10. Negative Covenants.  Prior to the Preferred Rights
        Reduction Date, unless the holders of at least 51% of the Stated Value of
        the
        then outstanding shares of Preferred Stock (except with respect to clause
        (c),
        below, which shall require 100% consent of the Holders) shall have otherwise
        given prior written consent, the Corporation shall not, and shall not permit
        any
        of its subsidiaries (whether or not a Subsidiary on the Original Issue Date)
        to,
        directly or indirectly:

      


      a)           other
        than Permitted Indebtedness, enter into, create, incur, assume, guarantee
        or
        suffer to exist any indebtedness for borrowed money of any kind, including
        but
        not limited to, a guarantee, on or with respect to any of its property or
        assets
        now owned or hereafter acquired or any interest therein or any income or
        profits
        therefrom;

      
 

      b)           other
        than Permitted Liens, enter into, create, incur, assume or suffer to exist
        any
        Liens of any kind, on or with respect to any of its property or assets now
        owned
        or hereafter acquired or any interest therein or any income or profits
        therefrom;

      


      c)           amend
        its certificate of incorporation, bylaws, this Certificate of Designation
        or
        other charter documents so as to materially and adversely affect any rights,
        preferences or power of any Holder;

      


      d)           redeem,
        repay, repurchase or offer to repay, repurchase or otherwise acquire more
        than a
de minimis number of shares of its Common Stock, Common Stock
        Equivalents or Junior Securities, except for the Conversion Shares to the
        extent
        permitted or required under the Transaction Documents or as otherwise permitted
        by the Transaction Documents;

      


      e)           authorize
        or create any class of stock ranking as to dividends, redemption or distribution
        of assets upon a Liquidation (as defined in Section 5) senior to or otherwise
        pari passu with the Preferred Stock;

      


      f)       
            increase the number of authorized shares of Preferred
        Stock;

      


      


      



      
        
          
          

        

        
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      g)           pay
        cash dividends or distributions on Junior Securities of the Corporation nor
        shall any monies be set aside for or applied to the purchase or redemption
        (through a sinking fund or otherwise) of any Junior Securities or shares
        pari passu with the Preferred Stock; or

      


      h)           enter
        into any agreement or understanding with respect to any of the
        foregoing.

      


      The
        provisions of this Section 10 shall terminate on the Preferred Rights
        Reduction Date and shall not thereafter apply to any Holder, with the exception
        of Subsection c) of this Section 10, which shall survive and in all respects
        persist even after the Preferred Rights Reduction Date.

      


      Section
        11. Miscellaneous.

      


      a)           Notices.  Any
        and all notices or other communications or deliveries to be provided by the
        Holders hereunder including, without limitation, any Notice of Conversion,
        shall
        be in writing and delivered personally, by facsimile, or sent by a nationally
        recognized overnight courier service, addressed to the Corporation, at the
        address set forth above, facsimile number 866-433-4352, Attention:
Lew Jaffe, or such other facsimile number or address as
        the Corporation
        may specify for such purposes by notice to the Holders delivered in accordance
        with this Section 11.  Any and all notices or other communications or
        deliveries to be provided by the Corporation hereunder shall be in writing
        and
        delivered personally, by facsimile, or sent by a nationally recognized overnight
        courier service addressed to each Holder at the facsimile number or address
        of
        such Holder appearing on the books of the Corporation, or if no such facsimile
        number or address appears on the books of the Corporation, at the principal
        place of business of the Holders.  Any notice or other communication
        or deliveries hereunder shall be deemed given and effective on the earliest
        of
        (i) the date of transmission, if such notice or communication is delivered
        via
        facsimile at the facsimile number specified in this Section 11 prior to 5:30
        p.m. (New York City time) on any date, (ii) the date immediately following
        the
        date of transmission, if such notice or communication is delivered via facsimile
        at the facsimile number specified in this Section 11 between 5:30 p.m. and
        11:59
        p.m. (New York City time) on any date, (iii) the second Business Day following
        the date of mailing, if sent by nationally recognized overnight courier service,
        or (iv) upon actual receipt by the party to whom such notice is required
        to be
        given.

      
 

      b)           Absolute
        Obligation. Except as expressly provided herein, no provision of this
        Certificate of Designation shall alter or impair the obligation of the
        Corporation, which is absolute and unconditional, to pay liquidated damages,
        accrued dividends and accrued interest, as applicable, on the shares of
        Preferred Stock at the time, place, and rate, and in the coin or currency,
        herein prescribed.

      
 

      c)           Lost
        or Mutilated Preferred Stock Certificate.  If a Holder’s Preferred
        Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation
        shall execute and deliver, in exchange and substitution for and upon
        cancellation of a mutilated certificate, or in lieu of or in substitution
        for a
        lost, stolen or destroyed certificate, a new certificate for the shares of
        Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt
        of evidence of such loss, theft or destruction of such certificate, and of
        the
        ownership hereof reasonably satisfactory to the Corporation.

      



      
        
          
          

        

        
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      d)           Governing
        Law.  All questions concerning the construction, validity,
        enforcement and interpretation of this Certificate of Designation shall be
        governed by and construed and enforced in accordance with the internal laws
        of
        the State of Nevada without regard to the principles of conflict of laws
        thereof.  Each party agrees that all legal proceedings concerning the
        interpretation, enforcement and defense of the transactions contemplated
        by any
        of the Transaction Documents (whether brought against a party hereto or its
        respective Affiliates, directors, officers, shareholders, employees or agents)
        shall be commenced in the state and federal courts sitting in the City of
        New
        York, Borough of Manhattan (the “New York Courts”).  Each party
        hereto hereby irrevocably submits to the exclusive jurisdiction of the New
        York
        Courts for the adjudication of any dispute hereunder or in connection herewith
        or with any transaction contemplated hereby or discussed herein (including
        with
        respect to the enforcement of any of the Transaction Documents), and hereby
        irrevocably waives, and agrees not to assert in any suit, action or proceeding,
        any claim that it is not personally subject to the jurisdiction of such New
        York
        Courts, or such New York Courts are improper or inconvenient venue for such
        proceeding.  Each party hereby irrevocably waives personal service of
        process and consents to process being served in any such suit, action or
        proceeding by mailing a copy thereof via registered or certified mail or
        overnight delivery (with evidence of delivery) to such party at the address
        in
        effect for notices to it under this Certificate of Designation and agrees
        that such service shall constitute good and sufficient service of process
        and
        notice thereof.  Nothing contained herein shall be deemed to limit in
        any way any right to serve process in any other manner permitted by applicable
        law. Each party hereto hereby irrevocably waives, to the fullest extent
        permitted by applicable law, any and all right to trial by jury in any legal
        proceeding arising out of or relating to this Certificate of Designation
        or the
        transactions contemplated hereby. If either party shall commence an action
        or
        proceeding to enforce any provisions of this Certificate of Designation,
        then
        the prevailing party in such action or proceeding shall be reimbursed by
        the
        other party for its attorneys’ fees and other costs and expenses incurred in the
        investigation, preparation and prosecution of such action or
        proceeding.

      
 

      e)           Waiver.  Any
        waiver by the Corporation or a Holder of a breach of any provision of this
        Certificate of Designation shall not operate as or be construed to be a waiver
        of any other breach of such provision or of any breach of any other provision
        of
        this Certificate of Designation or a waiver by any other Holders.  The
        failure of the Corporation or a Holder to insist upon strict adherence to
        any term of this Certificate of Designation on one or more occasions shall
        not be considered a waiver or deprive that party (or any other Holder) of
        the
        right thereafter to insist upon strict adherence to that term or any other
        term
        of this Certificate of Designation.  Any waiver by the Corporation or
        a Holder must be in writing.

      
 

      f)           Severability.  If
        any provision of this Certificate of Designation is invalid, illegal or
        unenforceable, the balance of this Certificate of Designation shall remain
        in
        effect, and if any provision is inapplicable to any Person or circumstance,
        it
        shall nevertheless remain applicable to all other Persons and
        circumstances.  If it shall be found that any interest or other amount
        deemed interest due hereunder violates the applicable law governing usury,
        the applicable rate of interest due hereunder shall automatically be lowered
        to
        equal the maximum rate of interest permitted under applicable law.

      



      
        
          
          

        

        
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      g)           Next
        Business Day.  Whenever any payment or other obligation hereunder
        shall be due on a day other than a Business Day, such payment shall be made
        on
        the next succeeding Business Day.

      


      h)           Headings.  The
        headings contained herein are for convenience only, do not constitute a part
        of
        this Certificate of Designation and shall not be deemed to limit or affect
        any
        of the provisions hereof.

      


      i)           Status
        of Converted or Redeemed Preferred Stock.  If any shares of
        Preferred Stock shall be converted, redeemed or reacquired by the Corporation,
        such shares shall resume the status of authorized but unissued shares of
        preferred stock and shall no longer be designated as Series C Convertible
        Preferred Stock.

      


      


      *********************

      


      


      RESOLVED,
        FURTHER, that the Chairman, the chief executive officer, president or any
        vice-president of the Corporation be and they hereby are authorized and
        directed to prepare and file a Certificate of Designation of Preferences,
        Rights, and Limitations in accordance with the foregoing resolution and the
        provisions of Nevada law.

      


      IN
        WITNESS WHEREOF, the undersigned has executed this Certificate this ___ day
        of
        July 2007.

      


      


      
        	 	
                __________________________________________

                Name:  LEWIS
                  JAFFE

                Title:  Chief
                  Executive Officer/President

                 

              


      

      


      


      


      


      


      


      


      


      



      
        
          
          

        

        
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      ANNEX
        A

      


      NOTICE
        OF
        CONVERSION

      


      (TO
        BE
        EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF PREFERRED
        STOCK)

      


      The
        undersigned hereby elects to convert the number of shares of  Series C
        Convertible Preferred Stock indicated below into shares of common stock,
        par
        value $0.001 per share (the “Common Stock”), of Oxford Media, Inc., a
        Nevada corporation (the “Corporation”), according to the conditions
        hereof, as of the date written below. If shares of Common Stock are to be
        issued
        in the name of a Person other than the undersigned, the undersigned will
        pay all
        transfer taxes payable with respect thereto and is delivering herewith such
        certificates and opinions as may be required by the Corporation in accordance
        with the Purchase Agreement. No fee will be charged to the Holders for any
        conversion, except for any such transfer taxes.

      


      Conversion
        calculations:

      


      Date
        to
        Effect Conversion: _____________________________________________

      


      Number
        of
        shares of Preferred Stock owned prior to Conversion:
        _______________

      


      Number
        of
        shares of Preferred Stock to be Converted: ________________________

      


      Stated
        Value of shares of Preferred Stock to be Converted:
        ____________________

      


      Number
        of
        shares of Common Stock to be Issued: ___________________________

      


      Applicable
        Conversion Price:____________________________________________

      


      Number
        of
        shares of Preferred Stock subsequent to Conversion:
        ________________

      


      Address
        for Delivery: ______________________

      or

      DWAC
        Instructions:

      Broker
        no: _________

      Account
        no: ___________

      


      
        	 	
                [HOLDER]

              
	 	 
	 	
                By:___________________________________

              
	 	
                Name:

              
	 	
                Title:

              


      

       

       

       

      
 

      24