oxford8k071607ex10-1.htm


    
      

      

    

    
      EXHIBIT
        10.1

       

    

    SECURITIES
      EXCHANGE AGREEMENT

     

    This
      Securities Exchange Agreement (this “Agreement”) is dated as of July ___,
      2007, among Oxford Media, Inc., a Nevada corporation (the “Company”) and
      each purchaser identified on the signature pages hereto (each, including its
      successors and assigns, a “Holder” and collectively the
“Holders”).

     

    WHEREAS,
      subject to the terms and conditions set forth in this Agreement and pursuant
      to
      Sections 3(a)(9) and 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”), the Company desires to issue and sell to each Holder,
      and each Holder, severally and not jointly, desires to purchase from the
      Company, securities of the Company as more fully described in this
      Agreement.

     

    NOW,
      THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
      and for other good and valuable consideration the receipt and adequacy of which
      are hereby acknowledged, the Company and each Holder agree as
      follows:

     

     

    ARTICLE
      I

    DEFINITIONS

     

    1.1       Definitions.  In
      addition to the terms defined elsewhere in this Agreement: (a) capitalized
      terms
      that are not otherwise defined herein have the meanings given to such terms
      in
      the Certificate of Designation (as defined herein), and (b) the following terms
      have the meanings set forth in this Section 1.1:

     

    “Action”
      shall have the meaning ascribed to such term in Section 3.1(h).

     

    “Affiliate”
      means any Person that, directly or indirectly through one or more
      intermediaries, controls or is controlled by or is under common control with
      a
      Person, as such terms are used in and construed under Rule 144 under the
      Securities Act.  With respect to a Holder, any investment fund or
      managed account that is managed on a discretionary basis by the same investment
      manager as such Holder will be deemed to be an Affiliate of such
      Holder.

     

    “Authorized
      Shares Deficiency” shall have the meaning ascribed to such term in Section
      4.10(b).

     

    “Authorized
      Share Reverse Action” shall have the meaning ascribed to such term in
      Section 4.10(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.

     

    “Certificate
      of Designation” means the Certificate of Designation to be filed prior to
      the Closing by the Company with the Secretary of State of Nevada in the form
      of
Exhibit B attached to the Purchase Agreement.

     

    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    “Closing”
      means the closing of the purchase and sale of the Securities pursuant to Section
      2.1.

     

    “Closing
      Date” means the Trading Day when all of the Transaction Documents have been
      executed and delivered by the applicable parties thereto, and, subject to
      Section 5.1, all conditions precedent set forth in Section 2.3 below have been
      satisfied or waived.

     

    “Commission”
      means the Securities and Exchange Commission.

     

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

     

    “Common
      Stock Equivalents” means any securities of the Company 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 exercisable
      or exchangeable for, or otherwise entitles the holder thereof to receive, Common
      Stock.

     

    “Company
      Counsel” means Spectrum Law Group, LLP, with offices at 1900 Main Street,
      Suite 125, Irvine, California, 92614.

     

    “Conversion
      Price” shall have the meaning ascribed to such term in the Certificate of
      Designation.

     

     “Effective
      Date”
means the date that the Registration Statement of the applicable Underlying
      Shares is filed by the Company pursuant to the Registration Rights Agreement
      is
      first declared effective by the Commission.

     

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

    


    “Exchange
      Amount” shall mean, as to each Holder as applicable, as of the Closing, the
      aggregate outstanding amount of (i) all indebtedness (principal and interest
      and
      all other amounts due under each respective underlying obligation, including
      but
      not limited to dividends); (ii) all amounts due in the nature of liquidated
      damages or any similar remedy or recovery; (iii) preferred stock; and (iv)
      warrants, each as beneficially owned by such Holder and to be exchanged for
      the
      Preferred Stock purchased hereunder, in each case to the extent specified below
      such Holder’s name on the signature page of this Agreement and next to the
      heading “Exchange Amount”.

    


    “FWS”
      means Feldman Weinstein & Smith LLP with offices located at 420 Lexington
      Avenue, Suite 2620, New York, New York 10170-0002.

    


    “Holder
      Party” shall have the meaning ascribed to such term in Section
      4.9.

    


    


    
      
        
          
          

        

        
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    “Legend
      Removal Date” shall have the meaning ascribed to such term in Section
      4.1(c).

    


    “Liens”
      means a lien, charge, security interest, encumbrance, right of first refusal,
      preemptive right or other restriction.

    


    “Material
      Adverse Effect” shall have the meaning assigned to such term in Section
      3.1(b).

    


    “Material
      Permits” shall have the meaning ascribed to such term in Section
      3.1(m).

    


    “Maximum
      Rate” shall have the meaning ascribed to such term in Section
      5.17.

    


    “Person”
      means an individual or corporation, partnership, trust, incorporated or
      unincorporated association, joint venture, limited liability company, joint
      stock company, government (or an agency or subdivision thereof) or other entity
      of any kind.

    


    “Preferred
      Stock” means the 15,828.55 shares of the Company’s Series C Convertible
      Preferred Stock issued hereunder, in addition to such shares issued as dividends
      on such preferred stock, having the rights, preferences and privileges set
      forth
      in the Certificate of Designation, in the form of Exhibit B attached
      hereto.

    


    “Proceeding”
      means an action, claim, suit, investigation or proceeding (including, without
      limitation, an investigation or partial proceeding, such as a deposition),
      whether commenced or threatened.

    


    “Purchase
      Agreement” means that certain Securities Purchase Agreement, dated as of the
      date hereof, by and among the Company and the purchasers signatory
      thereto.

    


    “Required
      Approvals” shall have the meaning ascribed to such term in Section
      3.1(e).

    “Required
      Minimum” means, as of any date, the maximum aggregate number of shares of
      Common Stock then issued or potentially issuable in the future pursuant to
      the
      Transaction Documents, including any Underlying Shares issuable upon conversion
      in full of all shares of Preferred Stock, ignoring any conversion limits set
      forth therein.

     

    “Registration
      Rights Agreement” means the Registration Rights Agreement, dated the date
      hereof, among the Company, the Holders and the signatories to the Purchase
      Agreement.

     

    “Registration
      Statement” shall mean a registration statement registering for resale the
      Underlying Shares as provided for in the Registration Rights
      Agreement.

     

    “Rule
      144” means Rule 144 promulgated by the Commission pursuant to the Securities
      Act, as such Rule may be amended from time to time, or any similar rule or
      regulation hereafter adopted by the Commission having substantially the same
      effect as such Rule.

    


    


    
      
        
          
          

        

        
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    “Securities”
      means thePreferred Stock and the Underlying Shares.

    


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

    


    “Senior
      Lenders” means, collectively, Palisades Master Fund, LP; Longview Fund,
      L.P.; Midsummer Investment Fund; Camofi Master LDC; Crescent International,
      Ltd.; Plus Four Private Equities, L.P.; Lew Jaffe; and, David L.
      Parker

    


    “Short
      Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
      under the Exchange Act (but shall not be deemed to include the location and/or
      reservation of borrowable shares of Common Stock).

    


    “Subsidiary”
      means any subsidiary of the Company as identified in Section
      3.1(a).

    


    “SVI
      Parties” means, collectively, SVI Healthcare, Inc. (formerly known as SVI
      SYSTEMS, INC.), an Illinois corporation; Marsha S. Glazer; Jay M. Glazer; The
      Marital Trust Under The Richard L. Owens Trust Dated November 24, 1992; and,
      Andrew Rubenstein.

    


    “Trading
      Day” means a day on which the Common Stock is traded on a Trading Market;
      provided that if the Company 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” means this Agreement, the Certificate of Designation, the
      Registration Rights Agreement and any other documents or agreements executed
      in
      connection with the transactions contemplated hereunder.

    


    “Underlying
      Shares” means the shares of Common Stock issued and issuable upon conversion
      of the Preferred Stock.

    


    “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 as reported by Bloomberg 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)  if the Common Stock is not then quoted for trading on 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 Holder and reasonably acceptable to the Company, the fees
      and
      expenses of which shall be paid by the Company.

     

    


    
      
        
          
          

        

        
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    ARTICLE
      II

    EXCHANGE

     

    
      	
               

            	
              2.1

            	
              Closing.

            


    

     

    (a)        On
      the Closing Date, upon the terms and subject to the conditions set forth herein,
      substantially concurrent with the execution and delivery of this Agreement
      by
      the parties hereto, the Company agrees to issue to each Holder shares of
      Preferred Stock, and each Holder agrees, severally and not jointly, to accept
      the shares of Preferred Stock in exchange for such Holder’s Exchange Amount in
      the following amounts set forth below and as further summarized on Exhibit
“A”, attached hereto and incorporated herein by reference:

     

    (i)         As
      to any Senior Non-Convertible Notes (represented by eight (8) separate notes
      in
      the total original principal balance of $11,500,000 with said total outstanding
      principal balance increased to $11,926,500 thereafter) comprising such Holder’s
      Exchange Amount, for each $1,000 of all amounts due and payable under the Senior
      Non-Convertible Notes exchanged hereunder, 1 share of Preferred
      Stock;

     

    (ii)        As
      to any Convertible Subordinated Notes (represented by three (3) separate notes
      in the total original principal balance of $2,350,000 and issued in connection
      with the Company’s acquisition of SVI Hotel Corporation) comprising such
      Holder’s Exchange Amount, for each $1,000 due and payable under the Convertible
      Subordinated Notes exchanged hereunder, 0.5 share of Preferred
      Stock;

     

    (iii)       As
      to any Series A Convertible Preferred Stock comprising such Holder’s Exchange
      Amount, for each $1,000 due and payable under such preferred stock exchanged
      hereunder (the outstanding stated value of which is $4,000,000), 0.25 share
      of
      Preferred Stock;

     

    (iv)       As
      to any Series B Convertible Preferred Stock comprising such Holder’s Exchange
      Amount, for each $1,000 due and payable under such preferred stock exchanged
      hereunder (the outstanding stated value of which is $3,857,000), 0.25 share
      of
      Preferred Stock; and

     

    


     

    


    
      
        
          
          

        

        
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    (v)        As
      to any Subordinated Non-Convertible Debt comprising such Holder’s Exchange
      Amount (comprised of (i) a note in favor of Edward Kelly in the original
      principal amount of $50,000; (ii) a note in favor of Paul & Kathleen Kelly
      in the original principal amount of $50,000; (iii) a note in favor of Nick
      Yocca
      in the original principal amount of $247,000; and, (iv) three notes in the
      total
      principal amount of $100,000 issued to the sellers of SVI Hotel Corporation),
      for each $1,000 due and payable under such debt exchanged hereunder, 0.125
      share
      of Preferred Stock.

     

    (b)        Each
      Holder shall deliver to the Company the certificates representing their
      respective Exchange Amount and the Company shall deliver to each Holder their
      respective shares of Preferred Stock and the other items set forth in Section
      2.2 issuable at the Closing.  Upon satisfaction of the conditions set
      forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of FWS,
      or
      such other location as the parties shall mutually agree.

     

    (c)        All
      Common Stock purchase warrants or options held by each Holder shall hereby
      terminate and be of no further force or effect.

     

    
      	
               

            	
              2.2

            	
              Deliveries.

            


    

     

    (a)        On
      or prior to the Closing Date, the Company shall deliver or cause to be delivered
      to each Holder the following:

     

    (i)          this
      Agreement duly executed by the Company;

     

    (ii)         a
      legal opinion of Company Counsel, in the form of Exhibit C attached
      hereto;

     

    (iii)        the
      Registration Rights Agreement duly executed by the Company; and

     

    (iv)        one
      or more certificates evidencing the shares of Preferred Stock issuable to such
      Holder pursuant to Section 2.1(a).

     

    (b)        On
      the Closing Date, each Holder shall deliver or cause to be delivered to the
      Company the following:

     

    (i)         this
      Agreement duly executed by such Holder;

     

    (ii)        the
      Registration Rights Agreement duly executed by such Purchaser; and

     

    (iii)       such
      Holder’s certificate representing the securities comprising the Exchange
      Amount.

     

    


    


    
      
        
          
          

        

        
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              2.3

            	
              Closing
                Conditions.

            


    

     

    (a)         The
      obligations of the Company hereunder in connection with the Closing are subject
      to the following conditions being met (or waived by the Company in its sole
      discretion):

     

    (i)         the
      accuracy in all material respects when made and on the Closing Date of the
      representations and warranties of each of the Holders contained
      herein;

     

    (ii)        all
      obligations, covenants and agreements of the Holders required to be performed
      at
      or prior to the Closing Date shall have been performed;

     

    (iii)       the
      execution (by all appropriate parties) and delivery of the Purchase Agreement
      and the Registration Rights Agreement; and

     

    (iv)       the
      delivery by the Holders of the items set forth in Section 2.2(b) of this
      Agreement.

     

    (b)        The
      obligations of each Holder hereunder in connection with the Closing are subject
      to the following conditions being met (or waived by such Holder in its sole
      discretion):

     

    (i)          the
      accuracy in all material respects when made and on the Closing Date of the
      representations and warranties of the Company contained herein;

     

    (ii)         all
      obligations, covenants and agreements of the Company required to be performed
      at
      or prior to the Closing Date shall have been performed;

     

    (iii)        the
      delivery by the Company of the items set forth in Section 2.2(a) of this
      Agreement;

     

    (iv)       David
      Parker shall have tendered his resignation from the Board of Directors, with
      an
      effective date of July 16, 2007;

     

    (v)        Lew
      Jaffe shall have agreed to a written restructuring of his employment agreement
      which is reasonably acceptable to a majority of the Holders;

     

    (vi)       the
      execution (by all appropriate parties) and delivery of the Settlement and
      Amendment Agreement to be executed with the sellers of SVI Hotel
      Corporation;

     

    


    
      
        
          
          

        

        
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    (vii)       the
      execution (by all appropriate parties) and delivery of the Purchase Agreement
      and the closing of the transactions contemplated thereby, with the Company
      receiving gross proceeds of at least $3,500,000 from the sale of the Company’s
      senior secured debentures, the terms of which are set forth on Exhibit
      2.1(g)(ii) attached hereto (the “Debentures”);

     

    (viii)      the
      execution (by all appropriate parties) and delivery of the Registration Rights
      Agreement;

     

    (ix)        the
      execution and delivery by each other Holder with an entry set forth on Exhibit
      A
      hereto (Exchange Amounts) of all documents and instruments contemplated to
      be
      delivered hereunder; and

     

    (x)        there
      shall have been no Material Adverse Effect with respect to the Company since
      the
      date hereof.

     

     

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1        Representations
      and Warranties of the Company.  The Company hereby makes the
      following representations and warranties to each Holder:

     

    (a)        Subsidiaries.  All
      of the direct and indirect subsidiaries of the Company are set forth in the
      Company’s Annual Report on Form 10-K for the year ended December 31, 2006, as
      filed with the Commission. The Company owns, directly or indirectly, all of
      the
      capital stock or other equity interests of each Subsidiary free and clear of
      any
      Liens, and all of the issued and outstanding shares of capital stock of each
      Subsidiary are validly issued and are fully paid, non-assessable and free of
      preemptive and similar rights to subscribe for or purchase
      securities.

     

    (b)        Organization
      and Qualification.  The Company and each of the Subsidiaries is an
      entity duly incorporated or otherwise organized, validly existing and in good
      standing under the laws of the jurisdiction of its incorporation or organization
      (as applicable), with the requisite power and authority to own and use its
      properties and assets and to carry on its business as currently
      conducted.  Neither the Company nor any Subsidiary is in violation or
      default of any of the provisions of its respective certificate or articles
      of
      incorporation, bylaws or other organizational or charter
      documents.  Each of the Company and the Subsidiaries is duly qualified
      to conduct business and is in good standing as a foreign corporation or other
      entity in each jurisdiction in which the nature of the business conducted or
      property owned by it makes such qualification necessary, except where the
      failure to be so qualified or in good standing, as the case may be, could not
      have or reasonably be expected to result in (i) a material adverse effect on
      the
      legality, validity or enforceability of any Transaction Document, (ii) a
      material adverse effect on the results of operations, assets, business,
      prospects or condition (financial or otherwise) of the Company and the
      Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
      Company’s ability to perform in any material respect on a timely basis its
      obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material Adverse Effect”) and no Proceeding has been instituted in any
      such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit
      or curtail such power and authority or qualification.

     

    


    
      
        
          
          

        

        
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    (c)        Authorization;
      Enforcement.  The Company has the requisite corporate power and
      authority to enter into and to consummate the transactions contemplated by
      each
      of the Transaction Documents and otherwise to carry out its obligations
      hereunder and thereunder.  The execution and delivery of each of the
      Transaction Documents by the Company and the consummation by it of the
      transactions contemplated hereby and thereby have been duly authorized by all
      necessary action on the part of the Company and no further action is required
      by
      the Company, its board of directors or its stockholders in connection therewith
      other than in connection with the Required Approvals.  Each
      Transaction Document has been (or upon delivery will have been) duly executed
      by
      the Company and, when delivered in accordance with the terms hereof and thereof,
      will constitute the valid and binding obligation of the Company enforceable
      against the Company in accordance with its terms except (i) as limited by
      general equitable principles and applicable bankruptcy, insolvency,
      reorganization, moratorium and other laws of general application affecting
      enforcement of creditors’ rights generally, (ii) as limited by laws relating to
      the availability of specific performance, injunctive relief or other equitable
      remedies and (iii) insofar as indemnification and contribution provisions may
      be
      limited by applicable law.

     

    (d)        No
      Conflicts.  The execution, delivery and performance of the
      Transaction Documents by the Company and the consummation by the Company of
      the
      transactions contemplated hereby and thereby do not and will not: (i) conflict
      with or violate any provision of the Company’s or any Subsidiary’s certificate
      or articles of incorporation, bylaws or other organizational or charter
      documents, or (ii) conflict with, or constitute a default (or an event that
      with
      notice or lapse of time or both would become a default) under, result in the
      creation of any Lien upon any of the properties or assets of the Company or
      any
      Subsidiary, or give to others any rights of termination, amendment, acceleration
      or cancellation (with or without notice, lapse of time or both) of, any
      agreement, credit facility, debt or other instrument (evidencing a Company
      or
      Subsidiary debt or otherwise) or other understanding to which the Company or
      any
      Subsidiary is a party or by which any property or asset of the Company or any
      Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
      conflict with or result in a violation of any law, rule, regulation, order,
      judgment, injunction, decree or other restriction of any court or governmental
      authority to which the Company or a Subsidiary is subject (including federal
      and
      state securities laws and regulations), or by which any property or asset of
      the
      Company or a Subsidiary is bound or affected; except in the case of each of
      clauses (ii) and (iii), such as could not have or reasonably be expected to
      result in a Material Adverse Effect.

     

    (e)        Filings,
      Consents and Approvals.  The Company is not required to obtain any
      consent, waiver, authorization or order of, give any notice to, or make any
      filing or registration with, any court or other federal, state, local or other
      governmental authority or other Person (other than the Holders) in connection
      with the execution, delivery and performance by the Company of the Transaction
      Documents, other than (i) the Authorized Share Reverse Action, (ii) filings
      required pursuant to Section 4.6, (iii) the filing of Form D with the Commission
      and such filings as are required to be made under applicable state securities
      laws, (iv) filing of the registration statement contemplated by the
      Registration Rights Agreement or otherwise contemplated hereby and
      (v) filing of any of the foregoing with the appropriate Trading
      Market(s)  (collectively, the “Required
      Approvals”).

     

    


    
      
        
          
          

        

        
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    (f)         Issuance
      of the Securities.  As of the Closing Date, the Securities will be
      duly authorized and, when issued and paid for in accordance with the applicable
      Transaction Documents, will be duly and validly issued, fully paid and
      nonassessable, free and clear of all Liens imposed by the Company or any other
      Person other than restrictions on transfer provided for in the Transaction
      Documents and, if applicable, pledges or other actions taken by any particular
      Holder with respect to such Holder’s Securities.  The Underlying
      Shares, when issued in accordance with the terms of the Transaction Documents,
      will be validly issued, fully paid and nonassessable, free and clear of all
      Liens imposed by the Company.

     

    (g)        Capitalization.  The
      capitalization of the Company as of the date hereof, immediately prior to the
      Closing, is as set forth on Schedule 3.1(g)(i), and the capitalization of
      the Company immediately following the Closing, assuming consummation of the
      transactions contemplated by this Agreement and the Purchase Agreement, will
      be
      as set forth on Schedule 3.1(g)(ii), each of which schedule shall include
      the number of shares of Common Stock and all other equity securities or
      convertible debt securities owned or to be owned beneficially, and of record,
      by
      each security holder of the Company (other than security holders who hold less
      than 1% of the Common Stock as of the date hereof and are not Affiliates of
      any
      party to the Exchange or the Purchase Agreement, which security holders are
      denominated as a group as Other Common Stockholders), together with the
      outstanding options, warrants, scrip rights to subscribe to, calls or
      commitments of any character whatsoever relating to, or securities, rights
      or
      obligations convertible into or exercisable or exchangeable for, or giving
      any
      Person any right to subscribe for or acquire, any shares of Common Stock, or
      contracts, commitments, understandings or arrangements by which the Company
      or
      any Subsidiary is or may become bound to issue additional shares of Common
      Stock
      or Common Stock Equivalents.  Except for the Authorized Shares
      Increase Action, no further approval or authorization of any stockholder, the
      Board of Directors of the Company or others is required for the issuance and
      sale of the Securities.  There are no stockholders agreements, voting
      agreements or other similar agreements with respect to the Company’s capital
      stock to which the Company is a party or, to the knowledge of the Company,
      between or among any of the Company’s stockholders

     

    (h)        Litigation.  There
      is no action, suit, inquiry, notice of violation, proceeding or investigation
      pending or, to the knowledge of the Company, threatened against or affecting
      the
      Company, any Subsidiary or any of their respective properties before or by
      any
      court, arbitrator, governmental or administrative agency or regulatory authority
      (federal, state, county, local or foreign) (collectively, an “Action”)
      which (i) adversely affects or challenges the legality, validity or
      enforceability of any of the Transaction Documents or the Securities or (ii)
      could, if there were an unfavorable decision, have or reasonably be expected
      to
      result in a Material Adverse Effect.  Neither the Company nor any
      Subsidiary, nor any director or officer thereof, is or has been the subject
      of
      any Action involving a claim of violation of or liability under federal or
      state
      securities laws or a claim of breach of fiduciary duty. The Commission has
      not
      issued any stop order or other order suspending the effectiveness of any
      registration statement filed by the Company or any Subsidiary under the Exchange
      Act or the Securities Act.

     

    


    
      
        
          
          

        

        
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    (i)         Transactions
      with Affiliates and Employees.  None of the officers or directors
      of the Company and, to the knowledge of the Company, none of the employees
      of
      the Company is presently a party to any transaction with the Company or any
      Subsidiary, including any contract, agreement or other arrangement providing
      for
      the furnishing of services to or by, providing for rental of real or personal
      property to or from, or otherwise requiring payments to or from any officer,
      director or such employee or, to the knowledge of the Company, any entity in
      which any officer, director, or any such employee has a substantial interest
      or
      is an officer, director, trustee or partner, in each case in excess of $60,000
      other than for (i) payment of salary, consulting fees and directors’ fees for
      services rendered in the ordinary course of business consistent with past
      practices, (ii) reimbursement for expenses incurred on behalf of the Company
      and
      (iii) other employee benefits granted in the ordinary course of business,
      including stock option agreements under any stock option plan of the Company
      disclosed in filings with the Commission.

     

    (j)         Certain
      Fees.  (i) Except as otherwise disclosed on Schedule 3.1(j)
      attached hereto and incorporated herein, no brokerage or finder’s fees or
      commissions are or will be payable by the Company to any broker, financial
      advisor or consultant, finder, placement agent, investment banker, bank or
      other
      Person with respect to the transactions contemplated by the Transaction
      Documents; and (ii) the Holders shall have no obligation with respect to any
      fees or with respect to any claims made by or on behalf of other Persons for
      fees of a type contemplated in this Section that may be due in connection with
      the transactions contemplated by the Transaction Documents.

     

    (k)        Private
      Placement. Assuming the accuracy of the Holders’ representations and
      warranties set forth in Section 3.2, no registration under the Securities Act
      is
      required for the offer and sale of the Securities by the Company to the Holders
      as contemplated hereby.

     

    (l)         Listing
      and Maintenance Requirements.  The Company’s Common Stock is
      registered pursuant to Section 12(b) or 12(g) of the Exchange Act.

     

    (m)       Disclosure.    All
      disclosure furnished by or on behalf of the Company to the Holders regarding
      the
      Company, its business and the transactions contemplated hereby, including the
      Disclosure Schedules to this Agreement, is true and correct and does not contain
      any untrue statement of a material fact or omit to state any material fact
      necessary in order to make the statements made therein, in light of the
      circumstances under which they were made, not misleading.   The
      press releases disseminated by the Company during the twelve months preceding
      the date of this Agreement taken as a whole do not contain any untrue statement
      of a material fact or omit to state a material fact required to be stated
      therein or necessary in order to make the statements, in light of the
      circumstances under which they were made and when made, not
      misleading.  The Company acknowledges and agrees that no Holder makes
      or has made any representations or warranties with respect to the transactions
      contemplated hereby other than those specifically set forth in Section 3.2
      hereof.

     

    


    
      
        
          
          

        

        
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    (n)        No
      Integrated Offering. Assuming the accuracy of the Holders’ representations
      and warranties set forth in Section 3.2, neither the Company, nor any of its
      Affiliates, nor any Person acting on its or their behalf has, directly or
      indirectly, made any offers or sales of any security or solicited any offers
      to
      buy any security, under circumstances that would cause this offering of the
      Securities to be integrated with prior offerings by the Company for purposes
      of
      the Securities Act or any applicable shareholder approval provision of any
      Trading Market on which any of the securities of the Company are listed or
      designated.

     

    (o)        No
      General Solicitation.  Neither the Company nor any person acting
      on behalf of the Company has offered or sold (i) any of the Securities by any
      form of general solicitation or general advertising, or (ii) any other
      securities of the Company with comparable rights and preferences by any form
      of
      general solicitation or general advertising within two months of the date
      hereof.  The Company has offered such Securities for sale only to the
      Holders and certain other “accredited investors” within the meaning of Rule 501
      under the Securities Act.

     

    (p)        Acknowledgment
      Regarding Holders’ Purchase of Securities.  The Company
      acknowledges and agrees that, to the best of its knowledge, each of the Holders
      is acting solely in the capacity of an arm’s length purchaser with respect to
      the Transaction Documents and the transactions contemplated
      thereby.  The Company further acknowledges that no Holder is acting as
      a financial advisor or fiduciary of the Company (or in any similar capacity)
      with respect to the Transaction Documents and the transactions contemplated
      thereby and any advice given by any Holder or any of their respective
      representatives or agents in connection with the Transaction Documents and
      the
      transactions contemplated thereby is merely incidental to the Holders’ purchase
      of the Securities.  The Company further represents to each Holder that
      the Company’s decision to enter into this Agreement and the other Transaction
      Documents has been based solely on the independent evaluation of the
      transactions contemplated hereby by the Company and its
      representatives.

     

    (q)        Acknowledgement
      Regarding Holders’ Trading Activity.  Anything in this Agreement
      or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f)
      and 4.16 hereof), it is understood and acknowledged by the Company (i) that
      none of the Holders have been asked to agree, nor has any Holder agreed, to
      desist from purchasing or selling, long and/or short, securities of the Company,
      or “derivative” securities based on securities issued by the Company or to hold
      the Securities for any specified term; (ii) that past or future open market
      or
      other transactions by any Holder, including Short Sales, and specifically
      including, without limitation, Short Sales or “derivative” transactions, before
      or after the closing of this or future private placement transactions, may
      negatively impact the market price of the Company’s publicly-traded securities;
      (iii) that any Holder, and counter-parties in “derivative” transactions to which
      any such Holder is a party, directly or indirectly, presently may have a “short”
position in the Common Stock; and (iv) that each Holder shall not be deemed
      to
      have any affiliation with or control over any arm’s length counter-party in any
“derivative” transaction. The Company further understands and acknowledges
      that (a) one or more Holders may engage in hedging activities at various times
      during the period that the Securities are outstanding, including, without
      limitation, during the periods that the value of the Underlying Shares
      deliverable with respect to Securities are being determined and (b) such hedging
      activities (if any) could reduce the value of the existing stockholders' equity
      interests in the Company at and after the time that the hedging activities
      are
      being conducted.  The Company acknowledges that such aforementioned hedging
      activities do not constitute a breach of any of the Transaction
      Documents.

     

    


    
      
        
          
          

        

        
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    (r)        Regulation
      M Compliance.  The Company has not, and to its knowledge no one acting
      on its behalf has, (i) taken, directly or indirectly, any action designed to
      cause or to result in the stabilization or manipulation of the price of any
      security of the Company to facilitate the sale or resale of any of the
      Securities, (ii) sold, bid for, purchased, or paid any compensation for
      soliciting purchases of, any of the securities of the Company, or (iii) paid
      or
      agreed to pay to any Person any compensation for soliciting another to purchase
      any other securities of the Company, other than, in the case of clauses (ii)
      and
      (iii), compensation paid to the Company’s placement agent in connection with the
      placement of the Securities.

     

    (s)        3(a)(9)
      Exchange. The exchange of securities comprising the Exchange Amounts is
      being consummated pursuant to Sections 3(a)(9) and 18(b)(4)(C) of the Securities
      Act.  Accordingly, pursuant to Rule 144(d), the holding period of the
      Underlying Shares shall tack back to the original issue date of the securities
      comprising the Exchange Amount.

     

    (t)        Representations
      and Warranties of the Purchase Agreement.  The representations and
      warranties of the Company made pursuant to the Purchase Agreement, as qualified
      by the Disclosure Schedules attached thereto and hereto and delivered to the
      Holders, are true and correct and does not contain any untrue statement of
      a
      material fact or omit to state any material fact necessary in order to make
      the
      statements made therein, in light of the circumstances under which they were
      made, not misleading.

     

    3.2       Representations
      and Warranties of the Holders.  Each Holder hereby, for itself and
      for no other Holder, represents and warrants as of the date hereof and as of
      the
      Closing Date to the Company as follows:

     

     

     

     

     

     

    


    
      
        
          
          

        

        
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    (a)        Organization;
      Authority.  Such Holder is an entity duly organized, validly
      existing and in good standing under the laws of the jurisdiction of its
      organization with full right, corporate or partnership power and authority
      to
      enter into and to consummate the transactions contemplated by the Transaction
      Documents and otherwise to carry out its obligations hereunder and thereunder
      (or, as appropriate, is an individual with full right, power and authority
      to
      enter into and to consummate the transactions contemplated by the Transaction
      Documents and otherwise to carry out his obligations hereunder and thereunder).
      The execution, delivery and performance by such Holder of the transactions
      contemplated by this Agreement have been duly authorized by all necessary
      corporate or similar action on the part of such Holder.  Each
      Transaction Document to which it is a party has been duly executed by such
      Holder, and when delivered by such Holder in accordance with the terms hereof,
      will constitute the valid and legally binding obligation of such Holder,
      enforceable against it in accordance with its terms, except (i) as limited
      by
      general equitable principles and applicable bankruptcy, insolvency,
      reorganization, moratorium and other laws of general application affecting
      enforcement of creditors’ rights generally, (ii) as limited by laws relating to
      the availability of specific performance, injunctive relief or other equitable
      remedies and (iii) insofar as indemnification and contribution provisions may
      be
      limited by applicable law.

     

    (b)        Own
      Account.  Such Holder understands that the Securities are
“restricted securities” and have not been registered under the Securities Act or
      any applicable state securities law and is acquiring the Securities as principal
      for its own account and not with a view to or for distributing or reselling
      such
      Securities or any part thereof in violation of the Securities Act or any
      applicable state securities law, has no present intention of distributing any
      of
      such Securities in violation of the Securities Act or any applicable state
      securities law and has no direct or indirect arrangement or understandings
      with
      any other persons to distribute or regarding the distribution of such Securities
      in violation of the Securities Act or any applicable state securities law (this
      representation and warranty not limiting such Holder’s right to sell the
      Securities pursuant to the Registration Statement or otherwise in compliance
      with applicable federal and state securities laws). Such Holder is acquiring
      the
      Securities hereunder in the ordinary course of its business.

     

    (c)        Holder
      Status.  At the time such Holder was offered the Securities, it
      was, and at the date hereof it is, and on each date on which it converts any
      shares of Preferred Stock, it will be either: (i) an “accredited investor” as
      defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities
      Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under
      the Securities Act.  Such Holder is not required to be registered as a
      broker-dealer under Section 15 of the Exchange Act.

     

    (d)        Experience
      of Such Holder.  Such Holder, either alone or together with its
      representatives, has such knowledge, sophistication and experience in business
      and financial matters so as to be capable of evaluating the merits and risks
      of
      the prospective investment in the Securities, and has so evaluated the merits
      and risks of such investment.  Such Holder is able to bear the
      economic risk of an investment in the Securities and, at the present time,
      is
      able to afford a complete loss of such investment.

     

    


    
      
        
          
          

        

        
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    (e)        General
      Solicitation.  Such Holder is not purchasing the Securities as a
      result of any advertisement, article, notice or other communication regarding
      the Securities published in any newspaper, magazine or similar media or
      broadcast over television or radio or presented at any seminar or any other
      general solicitation or general advertisement.

     

    (f)         Short
      Sales and Confidentiality Prior To The Date Hereof.  Other
      than the transaction contemplated hereunder, such Holder has not directly or
      indirectly, nor has any Person acting on behalf of or pursuant to any
      understanding with such Holder, executed any disposition, including Short
      Sales, in the securities of the Company during the period commencing from
      the time that such Holder first received a term sheet (written or oral) from
      the
      Company or any other Person setting forth the material terms of the transactions
      contemplated hereunder until the date hereof (“Discussion
      Time”).  Notwithstanding the foregoing, in the case of a Holder
      that is a multi-managed investment vehicle whereby separate portfolio managers
      manage separate portions of such Holder's assets and the portfolio managers
      have
      no direct knowledge of the investment decisions made by the portfolio managers
      managing other portions of such Holder's assets, the representation set forth
      above shall only apply with respect to the portion of assets managed by the
      portfolio manager that made the investment decision to purchase the Securities
      covered by this Agreement.  Other than to other Persons party to this
      Agreement, such Holder has maintained the confidentiality of all disclosures
      made to it in connection with this transaction (including the existence and
      terms of this transaction).

     

    (g)        No
      Commission or Other Recommendation for Solicitation of Exchange. The Holder
      has not received any commission or other remuneration for the solicitation
      of
      any of the participants in, or recommendation with respect to, the share
      exchange contemplated by this Agreement.

    


     

    ARTICLE
      IV

    OTHER
      AGREEMENTS OF THE PARTIES

     

    
      	
               

            	
              4.1

            	
              Transfer
                Restrictions.

            


    

     

    (a)        The
      Securities may only be disposed of in compliance with state and federal
      securities laws.  In connection with any transfer of Securities other
      than pursuant to an effective registration statement or Rule 144, to the Company
      or to an Affiliate of a Holder or in connection with a pledge as contemplated
      in
      Section 4.1(b), the Company may require the transferor thereof to provide to
      the
      Company an opinion of counsel selected by the transferor and reasonably
      acceptable to the Company, the form and substance of which opinion shall be
      reasonably satisfactory to the Company, to the effect that such transfer does
      not require registration of such transferred Securities under the Securities
      Act.  As a condition of transfer, any such transferee shall agree in
      writing to be bound by the terms of this Agreement and the Registration Rights
      Agreement and shall have the rights of a Holder under this Agreement and the
      Registration Rights Agreement.

     

    (b)        The
      Holders agree to the imprinting, so long as is required by this Section 4.1,
      of
      a legend on any of the Securities in the following form:

     

    


    
      
        
          
          

        

        
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    [NEITHER]
      THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE]
      [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
      COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
      TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
      TO
      AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
      APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
      TO
      THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
      ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON
      [EXERCISE] [CONVERSION] OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH
      A
      BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

     

    The
      Company acknowledges and agrees that a Holder may from time to time pledge
      pursuant to a bona fide margin agreement with a registered broker-dealer or
      grant a security interest in some or all of the Securities to a financial
      institution that is an “accredited investor” as defined in Rule 501(a) under the
      Securities Act and who agrees to be bound by the provisions of this Agreement
      and the Registration Rights Agreement and, if required under the terms of such
      arrangement, such Holder may transfer pledged or secured Securities to the
      pledgees or secured parties.  Such a pledge or transfer would not be
      subject to approval of the Company and no legal opinion of legal counsel of
      the
      pledgee, secured party or pledgor shall be required in connection
      therewith.  Further, no notice shall be required of such
      pledge.  At the appropriate Holder’s expense, the Company will execute
      and deliver such reasonable documentation as a pledgee or secured party of
      Securities may reasonably request in connection with a pledge or transfer of
      the
      Securities, including, if the Securities are subject to registration, the
      preparation and filing of any required prospectus supplement under Rule
      424(b)(3) under the Securities Act or other applicable provision of the
      Securities Act to appropriately amend the list of Selling Stockholders
      thereunder.

     

    


    


    


    


    


    
      
        
          
          

        

        
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    (c)        Certificates
      evidencing the Underlying Shares shall not contain any legend (including the
      legend set forth in Section 4.1(b) hereof): (i) while a registration statement
      covering the resale of such security is effective under the Securities Act,
      or
      (ii) following any sale of such Underlying Shares pursuant to Rule 144, or
      (iii)
      if such Underlying Shares are eligible for sale under Rule 144(k), or (iv)
      if
      such legend is not required under applicable requirements of the Securities
      Act
      (including judicial interpretations and pronouncements issued by the staff
      of
      the Commission). Upon a sale pursuant to a Registration Statement or pursuant
      to
      Rule 144, the Company shall cause its counsel to issue a legal opinion to the
      Company’s transfer agent promptly upon any such request, so long as the Holder
      provides the Company’s counsel with all such information counsel reasonably and
      customarily requests to provide such opinion. If all or any shares of Preferred
      Stock is converted at a time when there is an effective registration statement
      to cover the resale of the Underlying Shares, or if such Underlying Shares
      may
      be sold under Rule 144(k) or if such legend is not otherwise required under
      applicable requirements of the Securities Act (including judicial
      interpretations and pronouncements issued by the staff of the Commission) then
      such Underlying Shares shall be issued free of all legends.  The
      Company agrees that following the Effective Date or at such time as such legend
      is no longer required under this Section 4.1(c), it will, no later than five
      Trading Days following the delivery by a Holder to the Company or the Company’s
      transfer agent of a certificate representing Underlying Shares, as applicable,
      issued with a restrictive legend (such fifth Trading Day, the “Legend Removal
      Date”), deliver or cause to be delivered to such Holder a certificate
      representing such shares that is free from all restrictive and other legends;
      provided however that the Company has been provided with such information as
      is
      reasonably and customarily required to make the determination that the legend
      should be removed. The Company may not make any notation on its records or
      give
      instructions to any transfer agent of the Company that enlarge the restrictions
      on transfer set forth in this Section.  Certificates for Underlying
      Shares subject to legend removal hereunder shall be transmitted by the transfer
      agent of the Company to the Holders by crediting the account of the Holder’s
      prime broker with the Depository Trust Company System.

    


    (d)        In
      addition to such Holder’s other available remedies, the Company shall pay to a
      Holder, in cash, as partial liquidated damages and not as a penalty, for each
      $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date
      such Securities are submitted to the Company’s transfer agent) delivered for
      removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading
      Day (increasing to $20 per Trading Day 10 Trading Days after such damages have
      begun to accrue) for each Trading Day after the Legend Removal Date until such
      certificate is delivered without a legend; provided however that if the Company
      is not listed or quoted on a Trading Market, no such payment shall be required.
      Nothing herein shall limit such Holder’s right to pursue actual damages for the
      Company’s failure to deliver certificates representing any Securities as
      required by the Transaction Documents, and such Holder shall have the right
      to
      pursue all remedies available to it at law or in equity including, without
      limitation, a decree of specific performance and/or injunctive
      relief.

    


    (e)       
      Each Holder, severally and not jointly with the other Holders, agrees that
      the
      removal of the restrictive legend from certificates representing Securities
      as
      set forth in this Section 4.1 is predicated upon the Company’s reliance that the
      Holder will sell any Securities pursuant to either the registration requirements
      of the Securities Act, including any applicable prospectus delivery
      requirements, or an exemption therefrom, and that if Securities are sold
      pursuant to a Registration Statement, they will be sold in compliance with
      the
      plan of distribution set forth therein.

    


    


    
      
        
          
          

        

        
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    4.2        Acknowledgment
      of Dilution.  The Company acknowledges that the issuance of the
      Securities will result in substantial dilution of the outstanding shares of
      Common Stock.  The Company further acknowledges that its obligations
      under the Transaction Documents, including without limitation its obligation
      to
      issue the Underlying Shares pursuant to the Transaction Documents, are
      unconditional and absolute and not subject to any right of set off,
      counterclaim, delay or reduction, regardless of the effect of any such dilution
      or any claim the Company may have against any Holder and regardless of the
      dilutive effect that such issuance may have on the ownership of the other
      stockholders of the Company.

     

    4.3        Furnishing
      of Information.  From and after the Effective Date and as long as
      any Holder owns Securities, the Company covenants to timely file (or obtain
      extensions in respect thereof and file within the applicable grace period)
      all
      reports required to be filed by the Company after the date hereof pursuant
      to
      the Exchange Act.  As long as any Holder owns Securities, if the
      Company is not required to file reports pursuant to the Exchange Act, it will
      prepare and furnish to the Holders and make publicly available in accordance
      with Rule 144(c) such information as is required for the Holders to sell the
      Securities under Rule 144.  The Company further covenants that it will
      take such further action as any holder of Securities may reasonably request,
      to
      the extent required from time to time to enable such Person to sell such
      Securities without registration under the Securities Act within the requirements
      of the exemption provided by Rule 144, including providing a legal opinion
      of
      counsel if required by the Transfer Agent to effect such transfer.

     

    4.4        Integration.  The
      Company shall not sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Securities in a
      manner that would require the registration under the Securities Act of the
      sale
      of the Securities to the Holders or that would be integrated with the offer
      or
      sale of the Securities for purposes of the rules and regulations of any Trading
      Market.

     

    4.5        Conversion
      and Exercise Procedures.  The form of Notice of Conversion
      included in the Certificate of Designation sets forth the totality of the
      procedures required of the Holders in order to convert the Preferred
      Stock.  No additional legal opinion or other information or
      instructions shall be required of the Holders to convert their Preferred
      Stock.  The Company shall honor conversions of the Preferred Stock and
      shall deliver Underlying Shares in accordance with the terms, conditions and
      time periods set forth in the Transaction Documents.

     

    4.6        Securities
      Laws Disclosure; Publicity.  The Company shall, by the
      fourth Business Day following the date hereof, issue a Current Report on Form
      8-K, disclosing the material terms of the transactions contemplated hereby
      and
      including the Transaction Documents as exhibits thereto.  The Company
      and each Holder shall consult with each other in issuing any other press
      releases with respect to the transactions contemplated hereby, and neither
      the
      Company nor any Holder shall issue any such press release or otherwise make
      any
      such public statement without the prior consent of the Company, with respect
      to
      any press release of any Holder, or without the prior consent of each Holder,
      with respect to any press release of the Company, which consent shall not
      unreasonably be withheld or delayed, except if such disclosure is required
      by
      law, in which case the disclosing party shall promptly provide the other party
      with prior notice of such public statement or
      communication.  Notwithstanding the foregoing, the Company shall not
      publicly disclose the name of any Holder, or include the name of any Holder
      in
      any filing with the Commission or any regulatory agency or Trading Market,
      without the prior written consent of such Holder, except (i) as required by
      federal securities law in connection with (A) any registration statement
      contemplated by the Registration Rights Agreement and (B) the filing of final
      Transaction Documents (including signature pages thereto) with the Commission
      and (ii) to the extent such disclosure is required by law or Trading Market
      regulations, in which case the Company shall provide the Holders with prior
      notice of such disclosure permitted under this subclause (ii).

     

    


    
      
        
          
          

        

        
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    4.7        Shareholder
      Rights Plan.  No claim will be made or enforced by the Company or,
      with the consent of the Company, any other Person, that any Holder is an
“Acquiring Person” under any control share acquisition, business combination,
      poison pill (including any distribution under a rights agreement) or similar
      anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
      or that any Holder could be deemed to trigger the provisions of any such plan
      or
      arrangement, by virtue of receiving Securities under the Transaction Documents
      or under any other agreement between the Company and the Holders.

     

    4.8        Non-Public
      Information.  Except with respect to the material terms and
      conditions of the transactions contemplated by the Transaction Documents, the
      Company covenants and agrees that neither it nor any other Person acting on
      its
      behalf will provide any Holder or its agents or counsel with any information
      that the Company believes constitutes material non-public information, unless
      prior thereto such Holder shall have executed a written agreement regarding
      the
      confidentiality and use of such information.  The Company understands
      and confirms that each Holder shall be relying on the foregoing representations
      in effecting transactions in securities of the Company.

     

    4.9        Indemnification
      of Holders.   Subject to the provisions of this Section 4.9,
      the Company will indemnify and hold each Holder and its directors, officers,
      shareholders, members, partners, employees and agents (and any other Persons
      with a functionally equivalent role of a Person holding such titles
      notwithstanding a lack of such title or any other title), each Person who
      controls such Holder (within the meaning of Section 15 of the Securities Act
      and
      Section 20 of the Exchange Act), and the directors, officers, shareholders,
      agents, members, partners or employees (and any other Persons with a
      functionally equivalent role of a Person holding such titles notwithstanding
      a
      lack of such title or any other title) of such controlling person (each, a
      “Holder Party”) harmless from any and all losses, liabilities,
      obligations, claims, contingencies, damages, costs and expenses, including
      all
      judgments, amounts paid in settlements, court costs and reasonable attorneys’
fees and costs of investigation that any such Holder Party may suffer or incur
      as a result of or relating to (a) any material breach of any of the material
      representations, warranties, covenants or agreements made by the Company in
      this
      Agreement or in the other Transaction Documents or (b) any action instituted
      against a Holder, or any of them or their respective Affiliates, by any
      stockholder of the Company who is not an Affiliate of such Holder, with respect
      to any of the transactions contemplated by the Transaction Documents (unless
      such action is based upon a breach of such Holder’s representations, warranties
      or covenants under the Transaction Documents or any agreements or understandings
      such Holder may have with any such stockholder or any violations by the Holder
      of state or federal securities laws or any conduct by such Holder which
      constitutes fraud, gross negligence, willful misconduct or
      malfeasance).  If any action shall be brought against any Holder Party
      in respect of which indemnity may be sought pursuant to this Agreement, such
      Holder Party shall promptly notify the Company in writing, and the Company
      shall
      have the right to assume the defense thereof with counsel of its own choosing
      reasonably acceptable to the Holder Party.  Any Holder Party shall
      have the right to employ separate counsel in any such action and participate
      in
      the defense thereof, but the fees and expenses of such counsel shall be at
      the
      expense of such Holder Party except to the extent that (i) the employment
      thereof has been specifically authorized by the Company in writing, (ii) the
      Company has failed after a reasonable period of time to assume such defense
      and
      to employ counsel or (iii) in such action there is, in the reasonable opinion
      of
      such separate counsel, a material conflict on any material issue between the
      position of the Company and the position of such Holder Party, in which case
      the
      Company shall be responsible for the reasonable fees and expenses of no more
      than one such separate counsel for each class of Holder Parties with
      substantially identical interests in all pending issues.  The Company
      will not be liable to any Holder Party under this Agreement (i) for any
      settlement by a Holder Party effected without the Company’s prior written
      consent, which shall not be unreasonably withheld or delayed; or (ii) to the
      extent, but only to the extent that a loss, claim, damage or liability is
      attributable to any Holder Party’s breach of any of the representations,
      warranties, covenants or agreements made by such Holder Party in this Agreement
      or in the other Transaction Documents.

     

    


    
      
        
          
          

        

        
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              4.10

            	
              Reservation
                and Listing of Securities.

            


    

     

    (a)        Subject
      to Sections 4.10(b) and (c), the Company shall maintain a reserve from its
      duly
      authorized shares of Common Stock for issuance pursuant to the Transaction
      Documents in such amount as may be required to fulfill its obligations in full
      under the Transaction Documents.

     

    (b)        Subject
      to Section 4.10(c), if, on any date, the number of authorized but unissued
      (and
      otherwise unreserved) shares of Common Stock is less than 100% of (i) the
      Required Minimum on such date, minus (ii) the number of shares of Common Stock
      previously issued pursuant to the Transaction Documents (an “Authorized Share
      Deficiency”) then the Company shall immediately take commercially reasonable
      efforts to provide the Company with authorized shares of Common Stock in an
      amount sufficient to allow the Company to reserve the Required Minimum. Without
      limiting the generality of the forgoing sentence, as soon as practicable after
      the date of the occurrence of an Authorized Share Deficiency, but in no event
      later than forty-five (45) days after the occurrence of such Authorized Share
      Deficiency, the Company shall use its best efforts to either (i) obtain
      stockholder approval of an increase in the number of authorized shares of Common
      Stock or (ii) effect a properly authorized reverse stock split of its Common
      Stock whereby all post-split shares of unissued Common Stock would be authorized
      and available for issuance (each such action, an “Authorized Share Reverse
      Action”); provided that the Company will not be required at any time to
      authorize a number of shares of Common Stock greater than the maximum remaining
      number of shares of Common Stock that could possibly be issued after such time
      pursuant to the Transaction Documents and any other agreements binding on the
      Company, including any Underlying Shares issuable upon conversion in full of
      all
      Preferred Stock, ignoring any conversion limits set forth therein.

     

     

     

    


    
      
        
          
          

        

        
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    (c)        The
      Holders acknowledge that the Company does not have sufficient Common Stock
      authorized as of the Closing Date to reserve the Required Minimum and meet
      its
      other reserve requirements. Notwithstanding Section 4.10(a) and 4.10(b) to
      the
      contrary, the parties agree that: (i) such failure shall not be considered
      an
      Authorized Share Deficiency until September 30, 2007; (ii) prior to such date,
      the Company shall use its best efforts to take an Authorized Share Reverse
      Action; (iii) the Holders, to the extent each owns any Common Stock or Preferred
      Stock, will vote in favor of the Authorized Share Reverse Action; and (iv)
      pending such Authorized Share Reverse Action, the Company will reserve all
      unreserved Common Stock with respect to the Securities.

    


    (d)        The
      Company shall, if applicable: (i) in the time and manner required by the
      principal Trading Market, prepare and file with such Trading Market an
      additional shares listing application covering a number of shares of Common
      Stock at least equal to the Required Minimum on the date of such application,
      (ii) take all steps necessary to cause such shares of Common Stock to be
      approved for listing on such Trading Market as soon as possible thereafter,
      (iii) provide to the Holders evidence of such listing, and (iv) maintain the
      listing of such Common Stock on any date at least equal to the Required Minimum
      on such date on such Trading Market or another Trading Market.

     

    4.11      Equal
      Treatment of Holders.  No consideration shall be offered or paid
      to any Person to amend or consent to a waiver or modification of any provision
      of any of the Transaction Documents unless the same consideration is also
      offered to all of the parties to the Transaction Documents.  For
      clarification purposes, this provision constitutes a separate right granted
      to
      each Holder by the Company and negotiated separately by each Holder, and is
      intended for the Company to treat the Holders as a class and shall not in any
      way be construed as the Holders acting in concert or as a group with respect
      to
      the purchase, disposition or voting of Securities or otherwise.

     

    4.12      Short
      Sales and Confidentiality After The Date Hereof.  Each Holder
      severally and not jointly with the other Holders covenants that neither it
      nor
      any Affiliate acting on its behalf or pursuant to any understanding with it
      will
      execute any Short Sales during the period commencing at the Discussion Time
      and
      ending at the time that the transactions contemplated by this Agreement are
      first publicly announced as described in Section 4.6.  Each Holder,
      severally and not jointly with the other Holders, covenants that until such
      time
      as the transactions contemplated by this Agreement are publicly disclosed by
      the
      Company as described in Section 4.6, such Holder will maintain the
      confidentiality of all disclosures made to it in connection with this
      transaction (including the existence and terms of this
      transaction).  Each Holder understands and acknowledges, severally and
      not jointly with any other Holder, that the Commission currently takes the
      position that coverage of short sales of shares of the Common Stock “against the
      box” prior to the Effective Date of the Registration Statement with the
      Securities is a violation of Section 5 of the Securities Act, as set forth
      in
      Item 65, Section A, of the Manual of Publicly Available Telephone
      Interpretations, dated July 1997, compiled by the Office of Chief Counsel,
      Division of Corporation Finance.  Notwithstanding the foregoing, no
      Holder makes any representation, warranty or covenant hereby that it will not
      engage in Short Sales in the securities of the Company after the time that
      the
      transactions contemplated by this Agreement are first publicly announced as
      described in Section 4.6.  Notwithstanding the foregoing, in the case
      of a Holder that is a multi-managed investment vehicle whereby separate
      portfolio managers manage separate portions of such Holder’s assets and the
      portfolio managers have no direct knowledge of the investment decisions made
      by
      the portfolio managers managing other portions of such Holder’s assets, the
      covenant set forth above shall only apply with respect to the portion of assets
      managed by the portfolio manager that made the investment decision to purchase
      the Securities covered by this Agreement.

     

    


    
      
        
          
          

        

        
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    4.13      Form
      D; Blue Sky Filings.  The Company agrees to timely file, if
      necessary, a Form D with respect to the Securities as required under Regulation
      D and to provide a copy thereof, promptly upon request of any Holder. The
      Company shall take such action as the Company shall reasonably determine is
      necessary in order to obtain an exemption for, or to qualify the Securities
      for,
      sale to the Holders at the Closing under applicable securities or “Blue Sky”
laws of the states of the United States, and shall provide evidence of such
      actions promptly upon request of any Holder.

     

    4.14      Palisades
      Board of Directors.  At any time following the date hereof,
      Palisades Master Fund, L.P. (“Palisades Board Appointer”) or its
      designees shall have the right, in their sole discretion, to appoint 1 member
      to
      the Board of Directors of the Company.  The Board of Directors of the
      Company shall not exceed 9 members following any such
      appointment.  The Company agrees that it shall have its Board of
      Directors or nominating committee, if it has one, to re-nominate the individuals
      designated by Palisades Board Appointer or its designees, as directors pursuant
      to this Section 4.14 or for re-election at each meeting of shareholders called
      for such purpose, to recommend to the Company’s shareholders that that they vote
“for” such nominees, and that all proxies given to management are voted in favor
      of such nominees.  If Palisades Board Appointer shall exercise its
      right to appoint a member to the Company’s Board of Directors, the Company shall
      use best efforts to obtain and maintain directors and officers liability
      insurance in such amounts as are customary for companies of the Company’s size
      and market position; and shall enter into indemnification contracts with the
      individuals designated by Palisades Board Appointer, or its designees, as
      members of the Board of Directors, in form and substance customary under
      comparable circumstances and reasonably satisfactory to such
      individuals.  The right of Palisades Board Appointer, its designees,
      to appoint members of the Board of Directors pursuant to this Section 4.14
      shall
      terminate upon the earlier of (i) written notice of such termination by
      Palisades Board Appointer to the Company or (ii) the Debentures are paid-in-full
      and retired in their entirety.

     

    4.15      Midsummer
      Board of Directors.  At any time following the date hereof,
      Midsummer Investment Limited (“Midsummer Board Appointer”) or its
      designees shall have the right, in their sole discretion, to appoint 2 members
      to the Board of Directors of the Company.  The Board of Directors of
      the Company shall not exceed 9 members following any such
      appointment.  The Company agrees that it shall have its Board of
      Directors or nominating committee, if it has one, to re-nominate the individuals
      designated by Midsummer Board Appointer or its designees, as directors pursuant
      to this Section 4.15 or for re-election at each meeting of shareholders called
      for such purpose, to recommend to the Company’s shareholders that that they vote
“for” such nominees, and that all proxies given to management are voted in favor
      of such nominees.  If Midsummer Board Appointer shall exercise its
      right to appoint a member to the Company’s Board of Directors, the Company shall
      use best efforts to obtain and maintain directors and officers liability
      insurance in such amounts as are customary for companies of the Company’s size
      and market position; and shall enter into indemnification contracts with the
      individuals designated by Midsummer Board Appointer, or its designees, as
      members of the Board of Directors, in form and substance customary under
      comparable circumstances and reasonably satisfactory to such
      individuals.  The right of Midsummer Board Appointer, its designees,
      to appoint members of the Board of Directors pursuant to this Section 4.15
      shall
      terminate upon the earlier of (i) written notice of such termination by the
      Midsummer Board Appointer to the Company or (ii) the Debentures are paid-in-full
      and retired in their entirety.

     

    


    
      
        
          
          

        

        
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    4.16      Release.
      In consideration of the execution of this Agreement, the satisfaction of the
      terms and conditions of this Agreement, and other good and valuable
      consideration, the receipt and value of which is hereby confirmed, effective
      as
      of the Closing, the Senior Lenders on the one hand, and each of them, and the
      SVI Parties on the other hand, and each of them, hereby fully, finally, and
      forever settle and release each other from any and all claims, losses, fines,
      penalties, damages, demands, judgments, debts, obligations, interests,
      liabilities, causes of action, breaches of duty, costs, expenses, judgments
      and
      injunctions of any nature whatsoever, whether known or unknown, from all
      relationships between them as of the Closing (cumulatively referred to as the
      “Released Claims”). The Released Claims shall expressly not include any
      matters arising out of facts and circumstances arising or accruing after the
      Closing, and shall not include any matters arising out of this
      Agreement.

     

    4.17      Director
      Compensation.  Any compensation paid to members of the Board of
      Directors shall be reasonable and commensurate with what is customary in the
      industry.

     

     

    ARTICLE
      V

    MISCELLANEOUS

     

    5.1        Termination. 
      This Agreement may be terminated by any Holder, as to such Holder’s obligations
      hereunder only and without any effect whatsoever on the obligations between
      the
      Company and the other Holders, by written notice to the other parties, if the
      Closing has not been consummated on or before July 13, 2007; provided,
however, that such termination will not affect the right of any party
      to
      sue for any breach by the other party (or parties).

     

    5.2        Fees
      and Expenses.  At the Closing, the Company has agreed to reimburse
      Midsummer Capital, LLC (“Midsummer”) and the SVI Parties for their
      reasonable legal fees and expenses incurred in connection with the transactions
      contemplated herein.  Except as expressly set forth in the Transaction
      Documents to the contrary, each party shall pay the fees and expenses of its
      advisers, counsel, accountants and other experts, if any, and all other expenses
      incurred by such party incident to the negotiation, preparation, execution,
      delivery and performance of this Agreement.  The Company shall pay all
      transfer agent fees, stamp taxes and other taxes and duties levied in connection
      with the delivery of any Securities to the Holders.

     

    5.3        Entire
      Agreement.  The Transaction Documents, together with the exhibits
      and schedules thereto, contain the entire understanding of the parties with
      respect to the subject matter hereof and supersede all prior agreements and
      understandings, oral or written, with respect to such matters, which the parties
      acknowledge have been merged into such documents, exhibits and
      schedules.

     

    


    
      
        
          
          

        

        
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    5.4        Notices.  Any
      and all notices or other communications or deliveries required or permitted
      to
      be provided hereunder shall be in writing and shall be deemed given and
      effective on the earliest of (a) the date of transmission, if such notice or
      communication is delivered via facsimile at the facsimile number set forth
      on
      the signature pages attached hereto prior to 5:30 p.m. (New York City time)
      on a
      Trading Day, (b) the next Trading Day after the date of transmission, if such
      notice or communication is delivered via facsimile at the facsimile number
      set
      forth on the signature pages attached hereto on a day that is not a Trading
      Day
      or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the 2nd Trading
      Day
      following the date of mailing, if sent by U.S. nationally recognized overnight
      courier service, or (d) upon actual receipt by the party to whom such notice
      is
      required to be given.  The address for such notices and communications
      shall be as set forth on the signature pages attached hereto.

     

    5.5        Amendments;
      Waivers.  No provision of this Agreement may be waived, modified,
      supplemented or amended except in a written instrument signed, in the case
      of an
      amendment prior to the Automatic Conversion Date (as defined in the Certificate
      of Designation), by the Company and all holders of Preferred Stock then
      outstanding, in the case of an amendment after the Automatic Conversion Date,
      by
      the Company and Holders holding at least 67% of the shares of Preferred Stock
      then outstanding or, in the case of a waiver, by the party against whom
      enforcement of any such waived provision is sought.  No waiver of any
      default with respect to any provision, condition or requirement of this
      Agreement shall be deemed to be a continuing waiver in the future or a waiver
      of
      any subsequent default or a waiver of any other provision, condition or
      requirement hereof, nor shall any delay or omission of any party to exercise
      any
      right hereunder in any manner impair the exercise of any such
      right.

     

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

     

    5.7        Successors
      and Assigns.  This Agreement shall be binding upon and inure to
      the benefit of the parties and their successors and permitted
      assigns.  The Company may not assign this Agreement or any rights or
      obligations hereunder without the prior written consent of each Holder (provided
      that nothing herein shall prevent the Company from assigning the remaining
      obligations after the Closing Date through merger or comparable corporate
      transactions consummated in accordance with applicable law).  Any
      Holder may assign any or all of its rights under this Agreement to any Person
      to
      whom such Holder assigns or transfers any Securities, provided such transferee
      agrees in writing to be bound, with respect to the transferred Securities,
      by
      the provisions of the Transaction Documents that apply to the
“Holders”.

     

    5.8        No
      Third-Party Beneficiaries.  This Agreement is intended for the
      benefit of the parties hereto and their respective successors and permitted
      assigns and is not for the benefit of, nor may any provision hereof be enforced
      by, any other Person, except as otherwise set forth in Section 4.9.

     

    


    
      
        
          
          

        

        
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    5.9        Governing
      Law.  All questions concerning the construction, validity,
      enforcement and interpretation of the Transaction Documents shall be governed
      by
      and construed and enforced in accordance with the internal laws of the State
      of
      New York, without regard to the principles of conflicts of law
      thereof.  Each party agrees that all legal proceedings concerning the
      interpretations, enforcement and defense of the transactions contemplated by
      this Agreement and any other Transaction Documents (whether brought against
      a
      party hereto or its respective affiliates, directors, officers, shareholders,
      employees or agents) shall be commenced exclusively in the state and federal
      courts sitting in the City of New York.  Each party hereby irrevocably
      submits to the exclusive jurisdiction of the state and federal courts sitting
      in
      the City of New York, borough of Manhattan for the adjudication of any dispute
      hereunder or in connection herewith or with any transaction contemplated hereby
      or discussed herein (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 any such court, that such suit, action or proceeding
      is
      improper or is an  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 Agreement and agrees that such service
      shall
      constitute good and sufficient service of process and notice
      thereof.  Nothing contained herein shall be deemed to limit in any way
      any right to serve process in any other manner permitted by law.  The
      parties hereby waive all rights to a trial by jury.  If either party
      shall commence an action or proceeding to enforce any provisions of the
      Transaction Documents, then the prevailing party in such action or proceeding
      shall be reimbursed by the other party for its reasonable attorneys’ fees and
      other costs and expenses incurred with the investigation, preparation and
      prosecution of such action or proceeding.

     

    5.10      Survival.  The
      representations and warranties shall survive the Closing and the delivery of
      Securities for the applicable statue of limitations.

     

    5.11      Execution.  This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered
      hereunder, it being understood that both parties need not sign the same
      counterpart.  In the event that any signature is delivered by
      facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
      signature shall create a valid and binding obligation of the party executing
      (or
      on whose behalf such signature is executed) with the same force and effect
      as if
      such facsimile or “.pdf” signature page were an original thereof.

     

    5.12      Severability.  If
      any term, provision, covenant or restriction of this Agreement is held by a
      court of competent jurisdiction to be invalid, illegal, void or unenforceable,
      the remainder of the terms, provisions, covenants and restrictions set forth
      herein shall remain in full force and effect and shall in no way be affected,
      impaired or invalidated, and the parties hereto shall use their commercially
      reasonable efforts to find and employ an alternative means to achieve the same
      or substantially the same result as that contemplated by such term, provision,
      covenant or restriction.

     

    


    
      
        
          
          

        

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

     

    5.14      Replacement
      of Securities.  If any certificate or instrument evidencing any
      Securities is mutilated, lost, stolen or destroyed, the Company shall issue
      or
      cause to be issued in exchange and substitution for and upon cancellation
      thereof (in the case of mutilation), or in lieu of and substitution therefor,
      a
      new certificate or instrument, but only upon receipt of evidence reasonably
      satisfactory to the Company of such loss, theft or destruction.  The
      applicant for a new certificate or instrument under such circumstances shall
      also pay any reasonable third-party costs (including customary indemnity)
      associated with the issuance of such replacement Securities.

     

    5.15      Remedies.  In
      addition to being entitled to exercise all rights provided herein or granted
      by
      law, including recovery of damages, each of the Holders and the Company will
      be
      entitled to specific performance under the Transaction Documents.  The
      parties agree that monetary damages may not be adequate compensation for any
      loss incurred by reason of any breach of obligations contained in the
      Transaction Documents and hereby agrees to waive and not to assert in any action
      for specific performance of any such obligation the defense that a remedy at
      law
      would be adequate.

     

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

     

    5.17      Usury.  To
      the extent it may lawfully do so, the Company hereby agrees not to insist upon
      or plead or in any manner whatsoever claim, and will resist any and all efforts
      to be compelled to take the benefit or advantage of, usury laws wherever
      enacted, now or at any time hereafter in force, in connection with any claim,
      action or proceeding that may be brought by any Holder in order to enforce
      any
      right or remedy under any Transaction Document.  Notwithstanding any
      provision to the contrary contained in any Transaction Document, it is expressly
      agreed and provided that the total liability of the Company under the
      Transaction Documents for payments in the nature of interest shall not exceed
      the maximum lawful rate authorized under applicable law (the “Maximum
      Rate”), and, without limiting the foregoing, in no event shall any rate of
      interest or default interest, or both of them, when aggregated with any other
      sums in the nature of interest that the Company may be obligated to pay under
      the Transaction Documents exceed such Maximum Rate.  It is agreed that
      if the maximum contract rate of interest allowed by law and applicable to the
      Transaction Documents is increased or decreased by statute or any official
      governmental action subsequent to the date hereof, the new maximum contract
      rate
      of interest allowed by law will be the Maximum Rate applicable to the
      Transaction Documents from the effective date forward, unless such application
      is precluded by applicable law.  If under any circumstances
      whatsoever, interest in excess of the Maximum Rate is paid by the Company to
      any
      Holder with respect to indebtedness evidenced by the Transaction Documents,
      such
      excess shall be applied by such Holder to the unpaid principal balance of any
      such indebtedness or be refunded to the Company, the manner of handling such
      excess to be at such Holder’s election.

     

    


     

    


    
      
        
          
          

        

        
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    5.18      Independent
      Nature of Holders’ Obligations and Rights.  The obligations of
      each Holder under any Transaction Document are several and not joint with the
      obligations of any other Holder, and no Holder shall be responsible in any
      way
      for the performance or non-performance of the obligations of any other Holder
      under any Transaction Document.  Nothing contained herein or in any
      other Transaction Document, and no action taken by any Holder pursuant thereto,
      shall be deemed to constitute the Holders as a partnership, an association,
      a
      joint venture or any other kind of entity, or create a presumption that the
      Holders are in any way acting in concert or as a group with respect to such
      obligations or the transactions contemplated by the Transaction
      Documents.  Each Holder shall be entitled to independently protect and
      enforce its rights, including without limitation, the rights arising out of
      this
      Agreement or out of the other Transaction Documents, and it shall not be
      necessary for any other Holder to be joined as an additional party in any
      proceeding for such purpose.  Each Holder has been represented by its
      own separate legal counsel in their review and negotiation of the Transaction
      Documents.  For reasons of administrative convenience only, Holders
      and their respective counsel have chosen to communicate with the Company through
      FWS.  FWS does not represent all of the Holders but only
      Midsummer.  The Company has elected to provide all Holders with the
      same terms and Transaction Documents for the convenience of the Company and
      not
      because it was required or requested to do so by the Holders.

     

    5.19      Liquidated
      Damages.  The Company’s obligations to pay any partial liquidated
      damages or other amounts owing under the Transaction Documents is a continuing
      obligation of the Company and shall not terminate until all unpaid partial
      liquidated damages and other amounts have been paid notwithstanding the fact
      that the instrument or security pursuant to which such partial liquidated
      damages or other amounts are due and payable shall have been
      canceled.

     

    5.20      Construction.
      The parties agree that each of them and/or their respective counsel has reviewed
      and had an opportunity to revise the Transaction Documents and, therefore,
      the
      normal rule of construction to the effect that any ambiguities are to be
      resolved against the drafting party shall not be employed in the interpretation
      of the Transaction Documents or any amendments hereto.

     

    [Signature
      Page Follows]

    


    


    


    


    


    


    
      
        
          
          

        

        
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    IN
      WITNESS WHEREOF, the parties hereto have caused this Securities Exchange
      Agreement to be duly executed by their respective authorized signatories as
      of
      the date first indicated above.

     

    


    
      	
              OXFORD
                MEDIA, INC.

            	
              Address/Facsimile
                Number/E-mail

              Address
                for Notice:

            
	
              By:__________________________________________

              Name:

              Title:

               

            	 
	
              With
                a copy to (which shall not constitute notice):

               

               

               

            	 


    

    


    


    


    


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    [PURCHASER
      SIGNATURE PAGES TO OXMI SECURITIES EXCHANGE AGREEMENT]

    


    IN
      WITNESS WHEREOF, the undersigned have caused this Securities Exchange Agreement
      to be duly executed by their respective authorized signatories as of the date
      first indicated above.

     

    Name
      of
      Holder: ____________________________________________________

     

    Signature
      of Authorized Signatory of Holder: __________________________

     

    Name
      of
      Authorized Signatory: ____________________________________

     

    Title
      of
      Authorized Signatory: _____________________________________

     

    Email
      Address of Authorized Signatory:
      ___________________________________________

     

    Fax
      Number of Authorized Signatory:
      _________________________________________

     

     

    Address
      for Notice of Holder:

    


    


    


    


    Address
      for Delivery of Securities for Holder (if not same as above):

    


    


    


    


    


    Exchange
      Amount:

     

    Senior
      Non-Convertible Debt (including accrued and unpaid interest):

    Convertible
      Subordinated Debt (including accrued and unpaid interest):

    Series
      A
      Convertible Preferred Stock (including accrued and unpaid
      dividends):

    Series
      B
      Convertible Preferred Stock (including accrued and unpaid
      dividends):

    Subordinated
      Non-Convertible debt (including accrued and unpaid interest):

    


    Shares
      of
      Preferred Stock: ____________

    


    


    [SIGNATURE
      PAGES CONTINUE]

    


    


    
      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

    

    


    EXHIBIT
      “A”

    


    Summary
      of Exchange Amounts

    


    Section
      2.1(a)(i); Senior Non-Convertible Notes:

    


    
      	
              Holder

            	 	
              Total
                Amount

            	 	
              Preferred
                Shares

            	 	
              Common
                Shares

            
	 	 	 	 	 	 	 
	
              Palisades

            	 	
              $
                5,373,527

            	 	
              5,373.527

            	 	
              n/a

            
	
              Longview

            	 	
              $
                2,652,766

            	 	
              2,652.766

            	 	
              n/a

            
	
              Midsummer

            	 	
              $
                2,096,986

            	 	
              2,096.986

            	 	
              n/a

            
	
              Camofi

            	 	
              $
                1,048,493

            	 	
              1,048.493

            	 	
              n/a

            
	
              Cresent

            	 	
              $ 
                  524,247

            	 	
               524.2466

            	 	
              n/a

            
	
              Plus
                Four

            	 	
              $  
                 524,247

            	 	
               524.2466

            	 	
              n/a

            
	
              Parker

            	 	
              $   
                104,849

            	 	
               104.8493

            	 	
              n/a

            
	
              Jaffe

            	 	
              $   
                104,849

            	 	
               104.8493

            	 	
              n/a

            


    

    


    Section
      2.1(a)(ii); Convertible Subordinated Notes:

    


    
      	
              Owens
                Trust

            	 	
              $
                1,278,542

            	 	
                
                639.271

            	 	
              n/a

            
	
              Glazers

            	 	
              $
                1,278,542

            	 	
                 639.271

            	 	
              n/a

            
	
              Rubenstein

            	 	
              $     
                52,185

            	 	
                  
                26.092

            	 	
              n/a

            


    

    


    Section
      2.1(a)(iii); Series A Convertible Preferred Stock:

    


    
      	
              Palisades

            	 	
               
                4,134,040

            	 	
                1,033.51

            	 	
              n/a

            


    

    


    Section
      2.1(a)(iv); Series B Convertible Preferred Stock

    


    
      	
              Midsummer

            	 	
               
                3,985,179

            	 	
                 996.295

            	 	
              n/a

            


    

    


    Section
      2.1(a)(v); Subordinated Non-Convertible Debt

    


    
      	
              Yocca

            	 	
              $   
                297,839

            	 	
                  
                37.229

            	 	
              n/a

            
	
              Owens
                Trust

            	 	
              $     
                54,406

            	 	
                    
                6.800

            	 	
              n/a

            
	
              Glazers

            	 	
              $     
                54,406

            	
               

            	
                    
                6.800

            	 	
              n/a

            
	
              E.
                Kelly

            	 	
              $     
                52,144

            	 	
                    
                6.518

            	 	
              n/a

            
	
              P.
                Kelly

            	 	
              $     
                52,144

            	 	
                    
                6.518

            	 	
              n/a

            
	
              Rubenstein

            	 	
              $       
                2,221

            	 	
                    
                0.277

            	 	
              n/a

            


    

    


    


    


    
      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

    

    


    EXHIBIT
      “B”

    


    Certificate
      of Designation

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    
      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

    

    


    EXHIBIT
      “C”

    


    Legal
      Opinion of Company Counsel

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    
      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

    

    


    EXHIBIT
      2.1(g)(ii)

    


    Terms
      of the Company’s Senior Secured Debentures

    


    12%
      interest; senior security interest
      in all assets of the Company; interest payable  quarterly within 3
      Business Days of January 1, April 1, July 1 and October 1; principal paid in
      eight (8) equal installments at the same time interest payments are due
      hereunder commencing on September 30, 2009, with all remaining amounts due
      hereunder to be paid in full on the fourth anniversary of the
      Debentures.

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    
      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

    

    


    SCHEDULE
      3.1(g)(i)

    AND

    SCHEDULE
      3.1(g)(ii)

    


    Company
      Capitalization; Pre & Post Closing

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    
      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

    

    


    SCHEDULE
      3.1(j)

    


    Certain
      Fees

    


    1.           In
      the event Anthony Cantone or any affiliated or related entity executes the
      Purchase Agreement and invests in the Company, a fee equal to one percent (1%)
      of said investment will be due and payable to Barry Kaplan
      Associates.

    


    2.           In
      the event Marc Kreloff or any affiliated or related entity executes the Purchase
      Agreement and invests in the Company, a fee equal to eight percent (8%) of
      said
      investment will be due and payable to Early Bird Capital.

    


    


    


    


    


    


    


    


    


     

    
 

    


    


    


    


    


    


    


    


    


    35