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svi8k101607ex10-1.htm

    
      

      

    

     

    

    

    

    

    

    

    

    

    

    

    
      	
               

               

              SETTLEMENT
                AND MUTUAL RELEASE

              AGREEMENT

               

               

            

    

    

    

    

    

    

    

    LEWIS
      JAFFE

    

    and

    

    SVI
      MEDIA, INC.

    

    

    

    

    

    

    

    

    

    

    October
      16, 2007

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SETTLEMENT
      AND MUTUAL RELEASE AGREEMENT

    
      

      

    

    
      

    

    I

    

    PARTIES

    

    THIS
      SETTLEMENT AND MUTUAL
      RELEASE AGREEMENT (the “Agreement”) is entered into with an effective
      date of the 16th day of
      October,
      2007 (“Effective Date”), by and between LEWIS JAFFE, an individual residing in
      the State of California (“Jaffe”); and, SVI MEDIA, INC.,
      a Nevada corporation formerly known as OXFORD MEDIA, INC. (“SVI”). Jaffe and SVI
      are sometimes referred to collectively herein as the “Parties”, and each
      individually as a “Party”.

    

    II

    

    RECITALS

    

    A.         Jaffe
      was employed by SVI as its Chief Executive Officer (“CEO”) in order to render
      services generally associated with the CEO of a public company similar in size
      to SVI.

    

    B.­­­­­­­­­­­­­­­­­         Jaffe’s
      employment with SVI was subject to a written Executive Employment Agreement
      effective 15 February 2007 (the “Employment Agreement”), providing the terms and
      conditions of Jaffe’s employment with SVI.

    

    C.         Jaffe
      also currently serves as a member of the Board of Directors of SVI (the “SVI
      Board”).

    

    D.         Jaffe
      desires to tender his resignation as the CEO of SVI and terminate his employment
      relationship with SVI, with said termination to have an effective date of 31
      October 2007.

    

    E.         Jaffe
      also desires to resign from the SVI Board, with said resignation to be effective
      as of and on the 17th day of
      October
      2007.

    

    F.         The
      Parties mutually desire to have Jaffe voluntarily terminate his employment
      relationship without dispute or cause, effective as of 31 October 2007 (the
      “Employment Termination Date”), and to terminate his status as a member of the
      Board effective as of 17 October 2007 (the “Board Termination Date”). SVI
      conditionally agrees to the terms and conditions of this Agreement provided
      Jaffe: (i) enters into and complies with all of the terms and conditions of
      this
      Agreement, including but not limited to the provision of assurances to SVI
      that
      he will not assert any claims of any kind against SVI arising out of the
      Employment Agreement and his status as a member of the SVI Board; and, (ii)
      abides by and honors his obligations to maintain and protect the Trade Secrets
      and Confidential Information of SVI and its affiliates, subsidiaries,
      predecessors, parents, related businesses and entities.

    

    

    

    
      
        
           

        

        
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    G.        Jaffe
      conditionally offers to voluntarily terminate his employment relationship with
      SVI without dispute, effective as of the Employment Termination Date, and to
      terminate his status as a member of the SVI Board effective as of the Board
      Termination Date, in exchange for valid consideration to be transferred by
      SVI
      hereunder, so long as SVI enters into and complies with all of the terms and
      conditions of this Agreement, including but not limited to the provision of
      assurances to Jaffe that SVI will not assert any claims of any kind against
      Jaffe arising out of Jaffe’s employment with SVI and his status as a member of
      the SVI Board.

    

    H.        The
      Parties agree that so long as both Parties satisfy their respective obligations
      hereunder that the Employment Agreement will be terminated in all respects
      except as otherwise expressly provided for herein, and both Parties will waive
      any and all rights, remedies, and recoveries under the Employment
      Agreement.

    

    I.          This
      Agreement shall specifically encompass all claims and related factual and legal
      circumstances noted above (collectively, the “Claims”). As such, it is the
      intent of the Parties that their respective rights and obligations to each
      other
      from this day forward shall be determined exclusively under the terms of this
      Agreement, and that this Agreement supersedes, amends and restates any other
      employment agreements between the Parties.

    

    J.          All
      Parties are desirous of settling the Claims and releasing each other from all
      future liability.

    

    K.         NOW,
      THEREFORE, in consideration of the promises and the mutual covenants
      contained herein, and for other good and valuable consideration, the receipt
      and
      sufficiency of which are hereby acknowledged, the Parties, intending to be
      legally bound, hereby agree as follows:

    

    III

    

    RELEASE

    

    3.1        Exchange.
      In consideration of the execution of this Agreement, the payments and
      obligations described below to be made or satisfied, as appropriate, by SVI,
      the
      satisfaction of the obligations of each of the respective Parties hereunder,
      and
      other good and valuable consideration, the receipt and value of which is hereby
      confirmed, Jaffe on the one hand, and SVI on the other hand, shall 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,
      arising out of or related to the relationships between the Parties prior to
      the
      Effective Date, specifically including, but not limited to, the Claims
      (cumulatively referred to as the “Released Claims”).

    

    3.2        Complete
      Release and Hold Harmless. All Parties, for themselves, itself,
      their heirs, executors, administrators, successors, and assigns, hereby agree
      to
      release, discharge and hold harmless each other and the other’s directors,
      employees, shareholders, managers, officers, members, affiliates, subsidiaries,
      predecessors, parents, related businesses and entities, attorneys and each
      of
      their successors and assigns from any and all known and unknown claims of every
      nature and kind whatsoever which they now or hereafter may have with respect
      to
      each other and/or the Claims, notwithstanding Section 1542 of the California
      Civil Code, which provides that:

     

     

    
      
         

      

      
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              "A
                GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
                NOT KNOW
                OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
                AND
                WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
                WITH
                THE DEBTOR."

            

    

    

    All
      rights under §1542 of the
      California Civil Code, as well as under any other statutes or common law
      principles of similar effect, are hereby expressly, fully, knowingly,
      intentionally and forever waived and relinquished by the Parties. Each Party
      hereby acknowledges that each understands the significance and consequences
      of
      such waiver under §1542 of the California Civil Code, and that each had the
      opportunity to seek the advice of legal counsel of its choice.

    

    3.3        Scope
      of Jaffe’s Release. Jaffe further expressly understands that the
      rights being waived hereunder specifically include, but are not limited to,
      any
      and all claims under (as any of the same may be amended from time to time)
      Title
      VII of the Civil Rights Act of 1964; Sections 1981 and 1983 of the Civil Rights
      Act of 1866; Equal Pay Act; Americans with Disabilities Act; Age Discrimination
      in Employment Act; Employee Retirement Income Security Act; Fair Labor Standards
      Act; Family and Medical Leave Act; WARN Act; the United States and California
      Constitutions; California Fair Employment and Housing Act; California Family
      Rights Act; California Labor Code; any applicable California Industrial Welfare
      Commission Wage Order; with respect to the foregoing constitutional and
      statutory references, any comparable constitution, statute or regulation of
      any
      other state; all claims of discrimination or harassment on account of race,
      sex,
      sexual orientation, national origin, religion, disability, age, pregnancy,
      veteran’s status, or any other protected status under any federal or state
      statute; any federal, state or local law enforcing express or implied employment
      contracts or covenants of good faith and fair dealing; any federal, state or
      local laws providing recourse for alleged wrongful discharge or constructive
      discharge, termination in violation of public policy, tort, physical or personal
      injury, emotional distress, fraud, negligent misrepresentation, defamation,
      and
      any similar or related claim; together with any claim under any other local,
      state or federal law or constitution governing employment, discrimination or
      harassment in employment, or the payment of wages or benefits, whether or not
      now known, suspected or claimed, which Jaffe ever had, now has, or may claim
      to
      have in the future as of the date of this Agreement. This Agreement and
      the scope of the release by Jaffe hereunder expressly includes any statutory
      claims, including, but not limited to, claims under the Age Discrimination
      in
      Employment Act (the “ADEA”) and the Older Workers’ Benefit Protection Act
      (“OWBPA”), except that this Agreement does not waive rights or claims under the
      ADEA which may arise after the Effective Date of this
      Agreement.

    

    3.4       After
      Acquired Information. The Parties acknowledge that they may
      hereafter discover information, facts, or circumstances different from or in
      addition to those which they now know or believe to be true. Except as otherwise
      provided herein to the contrary, this Agreement shall remain in full force
      and
      effect in all respects notwithstanding such discovery, and the Parties expressly
      accept and assume the risk of such possible additions to or differences from
      those facts now known or believed to be true.

    

    3.5       Enforceability.
      The enforceability of this Agreement is conditioned upon each respective Party
      satisfying its respective obligations hereunder.

    

    3.6       Assignment
      of Released Claims. The Parties hereby covenant that none of the
      Released Claims has been assigned to any other person, and that no other person
      has any interest in any of the Released Claims. In the event any other person
      asserts any interest with respect to the Released Claims, then the Party
      breaching this covenant shall fully defend and indemnify the Party against
      whom
      such claim is asserted for any and all damages, costs, and fees of any
      kind.

    

    

    
      
        
           

        

        
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    3.7       Specific
      Exclusion. It is expressly understood that the release contained in
      this Agreement does not encompass or include any of the following:

    

    (a)        The
      promises and obligations of the Parties under this Agreement.

    

    (b)        The
      promises and obligations of Jaffe under the Employment Agreement intended to
      survive termination, as reflected in Section 6.5, below.

    

    (c)        The
      intentionally willful, tortious, or criminal acts of either Party after the
      execution of this Agreement.

    

    3.8       No
      Admission of Liability. Notwithstanding the terms and conditions of
      this Agreement, execution hereof shall in no manner or form constitute the
      admission of liability or responsibility of either Party in respect to the
      Claims.

    

    IV

    

    TERMINATE
      OF EMPLOYMENT AND BOARD RELATIONSHIP

    

    4.1       Voluntary
      Termination of Employment. The Parties agree that Jaffe has
      voluntarily terminated his employment with SVI, and that his last day of
      employment by and with SVI shall be deemed to be the 31st day of
      October,
      2007. As of the Employment Termination Date and as additional consideration
      hereunder, Jaffe shall have voluntarily resigned any and all positions he held
      in and with SVI. Notwithstanding the Employment Termination Date, the Employment
      Agreement shall be deemed to be terminated, except for those provisions
      contained therein which specifically are to survive termination, as of and
      on
      the Effective Date.

    

    4.2       Voluntary
      Resignation from the SVI Board. The Parties agree that Jaffe has
      voluntarily resigned from the SVI Board, and that his resignation shall be
      effective as of 17 October 2007. As of the Board Termination Date and as
      additional consideration hereunder, Jaffe shall have voluntarily resigned from
      the SVI Board, and SVI shall continue to provide and afford Jaffe with all
      indemnification protection as was in place at the time of the Board Termination
      Date. The Parties agree that no other amounts of any kind are owed by SVI to
      Jaffe in regard to his tenure as a member of the SVI Board

     

    4.3       Payment
      of Amounts Owed to Jaffe. The Parties hereby agree to the following
      payments which shall represent all amounts due Jaffe for unpaid and accrued
      wages and benefits, if applicable, including but not limited to sick leave,
      vacation time, severance, and all other amounts which may be due to Jaffe from
      SVI hereafter under the Employment Agreement, and Jaffe shall neither make,
      nor
      be entitled to any other amounts:

    

    4.3.1.    Accrued
      Salary. The Parties agree that the total amount of accrued salary
      owed to Jaffe is Ninety Two Thousand Five Hundred Seventy Six Dollars and Ninety
      Two Cents ($92,576.92), which amount is referred to herein as the “Accrued
      Salary”. The Accrued Salary will continue to be owed by SVI to Jaffe, without
      imposition of any interest or further amounts, and will be due and immediately
      payable upon the earlier of the following to occur: (i) the sale of
      substantially all of SVI’s assets or outstanding shares of stock; or, (ii) SVI
      reports that it is profitable in any Form 10K or 10Q filed with Securities
      and
      Exchange Commission.

    

    

    
      
        
           

        

        
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    4.3.2.    Accrued
      Vacation Pay. The Parties agree that the total amount of accrued
      vacation pay owed to Jaffe is Twenty Five Thousand Eight Hundred Twenty Three
      Dollars ($25,823), which amount is referred to herein as the “Accrued Vacation”.
      The Accrued Vacation will continue to be owed by SVI to Jaffe, without
      imposition of any interest or further amounts, and will be paid, in-full, on
      or
      before 05 November 2007.

    

    4.3.2.    Health
      Insurance Coverage. The Parties hereby agree that as additional
      consideration hereunder, SVI, at its sole cost and expense, shall maintain
      in
      full force and effect the health insurance benefits provided to Jaffe for a
      period of twelve (12) months from the Effective Date. Thereafter, such coverage
      shall terminate, unless Jaffe makes a proper election to continue such coverage
      under COBRA, in which case all such benefits shall be at his sole cost and
      expense. Any and all other coverage of any kind extending beyond the terms
      and
      conditions of this Agreement will be solely at the expense of Jaffe and subject
      to the terms and conditions of the documents governing the medical plan. It
      is
      the sole responsibility of Jaffe to comply with said terms and conditions,
      and
      SVI will have no liability for the future failure of Jaffe to acquire COBRA
      coverage.

    

    4.4       Express
      Waiver of Any Other Amounts. Jaffe hereby acknowledges that he is
      not entitled to receive, and will not claim, any damages, rights, benefits,
      or
      compensation other than as expressly set forth in this Agreement. Specifically,
      no vacation, benefits, earned or paid time off, or other accrual-based benefits
      of any kind (“Post Termination Benefits”) will accrue, vest or otherwise be
      credited to Jaffe after the Effective Date. Jaffe expressly waives, foregoes,
      and denies any right or claim to such Post Termination Benefits and acknowledges
      that no compensation, remuneration, or other form of payment or benefit is
      forthcoming based thereon, other than as the Parties expressly agree under
      Article V, below.

    

    V

    

    CONTINUED
      SERVICES

    

    5.1       Transition
      Period. The Parties have agreed that Jaffe’s employment will
      terminate as of and on the Employment Termination Date. During and throughout
      the period commencing on the Effective Date and continuing up to and until
      the
      Employment Termination Date (the “The Transition Period”), the Parties shall be
      bound by the following:

    

    (a)        During
      the Transition Period SVI shall pay to Jaffe the base salary, at the same
      intervals, as in effect as of the Effective Date, with said base salary
      guaranteed during the Transition Period unless Jaffe shall terminate his
      employment prior to the end of the Transition Period. It is expressly understood
      that the base salary does not include any other benefits or allowances (such
      as
      a car allowance or a phone allowance, for example), and that no such payments
      will be made to SVI to Jaffe unless expressly agreed upon by the Parties in
      writing.

    

    (b)        Jaffe
      shall render those services to SVI during the Transition Period as instructed
      by
      the SVI Board.

    

    

    
      
        
           

        

        
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    5.2        Contractor
      Services. Subsequent to the Employment Termination Date Jaffe may
      render services to SVI in the capacity as an “independent contractor” (as that
      term is commonly defined in a business and tax context), with the Parties
      further bound by the following with regard to such services and relationship
      (the “Contractor Services”):

    

    (a)        Such
      Contractor Services shall be rendered at the express agreement of the Parties,
      with no obligation on either Party to enter into such Contractor
      Services.

    

    (b)        All
      Contractor Services shall be defined by the SVI Board, with Jaffe compensated
      as
      an independent contractor at a rate equal to Jaffe’s base salary as of the
      Effective Date, paid in accordance with SVI’s then payroll
      policies.

    

    (c)        The
      Contractor Services shall be rendered, if at all, on a week-to-week basis,
      terminable at-will at any time by either Party.

    

    VI

    

    CONFIDENTIALITY
      AND BUSINESS RELATED PROVISIONS

    

    6.1        Non-Disclosure
      of Business Information. Jaffe shall not at any time, either
      directly or indirectly use, divulge, disclose or communicate to any person,
      firm, or corporation, in any manner whatsoever, any confidential information
      concerning any matters affecting or relating to the business of SVI, including,
      but not limited to, the names, buying habits, or practices of any of its
      customers, its marketing methods and related data, the names of any of its
      vendors or suppliers, costs of materials, the prices it obtains or has obtained
      or at which it sells or has sold its products or services, manufacturing and
      sales, costs, lists or other written records used in SVI's business,
      compensation paid to employees and other terms of employment, or any other
      confidential information of, about or concerning the business of SVI, its manner
      of operation, or other confidential data of any kind, nature, or description.
      The Parties hereby stipulate that as between them, the foregoing matters are
      important, material, and confidential trade secrets and affect the successful
      conduct of the SVI's business and its goodwill, and that any breach of any
      term
      of this paragraph is a material breach of this Agreement.

    

    

    6.2        Non-Solicitation
      of Employees. During and continuing for a period of three (3) years
      after the Effective Date of this Agreement, Jaffe shall not, directly or
      indirectly, cause or induce, or attempt to cause or induce, any employee of
      SVI
      to terminate his or her employment with SVI, as such employment exists at any
      time following the Effective Date.

    

    6.3        Return
      of Materials. Prior to execution of this Agreement Jaffe delivered
      to SVI all property, to the best of Jaffe’s knowledge, in his possession and
      which were required to be returned to SVI under this Agreement. Jaffe shall
      promptly deliver to SVI all further equipment, notebooks, documents, memoranda,
      reports, files, samples, books, correspondence, lists, computer disks and data
      bases, computer programs and reports, computer software, and all other written,
      graphic and computer generated or stored records relating to the business of
      SVI
      which are or have been in the possession or under the control of
      Jaffe.

    

    

    
      
        
           

        

        
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    6.4        No
      Disparaging Remarks. Neither Party shall make, or cause to be made,
      any statement or communicate any information (whether oral or written) that
      disparages or reflects negatively on the other or any of the parties released
      hereunder. Nothing herein shall
      preclude either Party from complying with a subpoena or other lawful
      process.

    

    6.5        Nondisclosure
      of Trade Secret/Confidential Information. Jaffe shall not at any
      time, whether during or subsequent to the execution of this Agreement, unless
      specifically consented to in writing by SVI, either directly or indirectly
      use,
      divulge, disclose or communicate to any person, firm, or corporation, in any
      manner whatsoever, any Confidential Information concerning any matters affecting
      or relating to the business of SVI, including, but not limited to, the names,
      buying habits, or practices or Confidential Information of any of its customers,
      Customer Accounts, its marketing methods and related data, the names of any
      of
      its vendors or suppliers, costs of materials, the prices it obtains or has
      obtained or at which it sells or has sold its products or services,
      manufacturing and sales, costs, lists or other written records used in SVI’s
      business, operations, production, facilities, equipment, machinery, processes,
      formulas, engineering, programs, methods, intellectual property, patents,
      trademarks, licensed marks, trade names, service marks (collectively,
“Intellectual Property”),  compensation paid to employees and other
      terms of employment, or any other Confidential Information of, about or
      concerning the business of SVI , its manner of operation, or other confidential
      data of any kind, nature, or description. The Parties hereby stipulate that
      as
      between them, all of the foregoing matters shall be referred to as “Confidential
      Information”, and are important, material, and confidential business “Trade
      Secrets” and affect the successful conduct of the SVI’s business and its
      goodwill, and that any breach of any term of this Section 6.5 is a material
      breach of this Agreement giving rise to immediate termination
      thereof.

    

    6.5.1.    “Customer
      Accounts”. As used herein, the term “Customer Accounts” shall mean
      all accounts of SVI and its affiliates, related businesses, predecessors,
      successors, subsidiaries, licensees, and business associations, whether now
      existing or hereafter developed or acquired, including any and all accounts
      developed or acquired by or through the efforts of Jaffe.  Without
      regard to whether any of the matters in this Agreement would otherwise be deemed
      confidential, material, or important, the Parties hereto stipulate that as
      between them the matters stated as Confidential Information in this Agreement
      are confidential, material, and important and gravely affect the effective
      and
      successful conduct of the business of SVI or its goodwill and that any breach
      of
      the terms of this Section 6.5 will be a material breach of this Agreement and
      shall constitute grounds for immediate termination thereof.

    

    6.5.2.    Misuse
      of Confidential Information. In the event that Jaffe breaches
      this Agreement and releases SVI Confidential Information or Trade Secrets,
      Jaffe
      shall fully indemnify, defend, pay, save, and hold SVI harmless from any and
      all
      claims, costs, judgments, and damages, including reasonable attorney's fees
      and
      expenses of council, which are incurred as a direct or indirect consequence
      thereof.

    

    6.5.3.   Proprietary
      Rights. Jaffe acknowledges SVI’s exclusive right, title and
      interest in and to its Intellectual Property, Confidential Information, Trade
      Secrets and registrations and the goodwill of the business symbolized thereby
      (collectively, “Proprietary Rights”) and will not, at any time, do or cause to
      be done any act or thing contesting or in any way impairing or tending to impair
      any part of SVI’s right, title, ownership and interest therein.

    

    

    
      
        
           

        

        
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    VII

    

    ADDITIONAL
      REPRESENTATIONS AND OBLIGATIONS

    

    7.1       Consideration
      Period. This Agreement has been delivered to Jaffe on the 30th
      day of September,
      2007. Jaffe shall have twenty-one (21) days to consider and sign this Agreement.
      Pursuant to Section 7.3, below, Jaffe has been encouraged to seek legal counsel
      to consider and review this Agreement. To the extent Jaffe does not use the
      full
      21-days within which to consider signing this Agreement, Jaffe’s signature
      hereto shall serve as Jaffe’s express written waiver of this period and of any
      and all claims, rights, or causes of action of any kind against SVI of any
      kind
      arising out of Jaffe’s voluntary decision to execute this Agreement and waive
      this consideration period.

    

    7.2       Revocation
      Period. Upon execution of this Agreement, Jaffe shall have seven
      (7) days to revoke the Agreement. Any such revocation by Jaffe must be in
      writing and delivered to SVI pursuant to the notice requirements under Article
      VIII, below. If timely revoked by Jaffe, this Agreement will not be effective
      or
      enforceable, and all Parties shall be immediately released of all obligations
      hereunder, with no affect on any of the claims each Party may otherwise
      possess.

    

    7.3       Independent
      Legal Counsel. The Parties to this Agreement warrant, represent,
      and agree that in executing this Agreement, they do so with full knowledge
      of
      the rights each may have with respect to the other Party, and that each has
      received, or has had the opportunity to receive, independent legal advice as
      to
      these rights. Each of the Parties has executed this Agreement with full
      knowledge of these rights, and under no fraud, coercion, duress, or undue
      influence.

    

    7.4       Waiver
      of Age Discrimination Claim. Jaffe understands that the release
      contained in this Agreement had to meet certain requirements to constitute
      a
      valid release of any claims under the Age Discrimination in Employment Act
      (“ADEA”), and Jaffe hereby represents that all such requirements were in fact
      satisfied. These requirements required the following, each of which has in
      fact
      been satisfied: (i) execution of this Agreement by Jaffe has been knowing and
      voluntary, and free from duress, coercion and mistake of fact; (ii) this
      Agreement is in writing and is understandable; (iii) this Agreement has waived
      current ADEA claims explicitly; (iv) this Agreement has not waived future ADEA
      claims; (v) the release by Jaffe hereunder of ADEA claims has been paid for
      with
      something to which Jaffe was not already entitled; (vi) this Agreement has
      advised Jaffe to consult an attorney; (vii) this Agreement has given Jaffe
      twenty-one (21) days to consider the ADEA release contained in this Agreement;
      and, (viii) this Agreement has given Jaffe seven (7) days within which to revoke
      the ADEA release contained in this Agreement after execution.

    

    7.5       Public
      Reporting. During and throughout the Transition Period Jaffe shall
      continue to timely execute for filing all documents required to be filed by
      SVI
      under the applicable rules and regulations of the Securities and Exchange
      Commission.

    

    VIII

    

    ADDITIONAL
      PROVISIONS

    

    

    
      
        
           

        

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

    

    8.2       Successors
      and Assigns. Except as expressly provided in this Agreement, each
      and all of the covenants, terms, provisions, conditions and agreements herein
      contained shall be binding upon and shall inure to the benefit of the successors
      and assigns of the Parties hereto.

    

    8.3       Article
      and Section Headings. The article and section headings used in this
      Agreement are inserted for convenience and identification only and are not
      to be
      used in any manner to interpret this Agreement.

    

    8.4       Severability.
      Each and every provision of this Agreement is severable and independent of
      any
      other term or provision of this Agreement. If any term or provision hereof
      is
      held void or invalid for any reason by a court of competent jurisdiction, such
      invalidity shall not affect the remainder of this Agreement.

    

    8.5       Governing
      Law. This Agreement shall be governed by the laws of the State of
      California, without giving effect to any choice or conflict of law provision
      or
      rule (whether of the State of California or any other jurisdiction) that would
      cause the application of the laws of any jurisdiction other than the State
      of
      California. If any court action is necessary to enforce the terms and conditions
      of this Agreement, the Parties hereby agree that the Superior Court of
      California, County of Orange, shall be the sole jurisdiction and venue for
      the
      bringing of such action.

    8.6       Entire
      Agreement. This Agreement, and all references, documents, or
      instruments referred to herein, contains the entire agreement and understanding
      of the Parties hereto in respect to the subject matter contained herein. The
      Parties have expressly not relied upon any promises, representations,
      warranties, agreements, covenants, or undertakings, other than those expressly
      set forth or referred to herein. This Agreement supersedes any and all prior
      written or oral agreements, understandings, and negotiations between the Parties
      with respect to the subject matter contained herein.

    

    8.7       Additional
      Documentation. The Parties hereto agree to execute, acknowledge,
      and cause to be filed and recorded, if necessary, any and all documents,
      amendments, notices, and certificates which may be necessary or convenient
      under
      the laws of the State of California.

    

    8.8       Attorney’s
      Fees. If any legal action (including arbitration) is necessary to
      enforce the terms and conditions of this Agreement, the prevailing Party shall
      be entitled to costs and reasonable attorney’s fees.

    

    8.9       Amendment.
      This Agreement may be amended or modified only by a writing signed by all
      Parties.

    

    8.10     Remedies.

    

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

    8.10.1.  Specific
      Performance. The Parties hereby declare that it is impossible to
      measure in money the damages which will result from a failure to perform any
      of
      the obligations under this Agreement. Therefore, each Party waives the claim
      or
      defense that an adequate remedy at law exists in any action or proceeding
      brought to enforce the provisions hereof.

    

    8.10.2.  Cumulative.
      The remedies of the Parties under this Agreement are cumulative and shall not
      exclude any other remedies to which any person may be lawfully
      entitled.

    

    8.11      Waiver.
      No failure by any Party to insist on the strict performance of any covenant,
      duty, agreement, or condition of this Agreement or to exercise any right or
      remedy on a breach shall constitute a waiver of any such breach or of any other
      covenant, duty, agreement, or condition.

    

    8.12      Assignability.
      This Agreement is not assignable by either Party without the expressed written
      consent of all Parties.

    

    8.13      Notices.
      All notices, requests and demands hereunder shall be in writing and delivered
      by
      hand, by facsimile transmission, by mail, by telegram or by recognized
      commercial over-night delivery service (such as Federal Express, UPS or DHL),
      and shall be deemed given (a) if by hand delivery, upon such delivery; (b)
      if by
      facsimile transmission, upon telephone confirmation of receipt of same; (c)
      if
      by mail, forty-eight (48) hours after deposit in the United States mail, first
      class, registered or certified mail, postage prepaid; (d) if by telegram, upon
      telephone confirmation of receipt of same; or, (e) if by recognized commercial
      over-night delivery service, upon such delivery.

    

    8.14      Time.
      All Parties agree that time is of the essence as to this Agreement.

    

    

    

    

    

    

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    

    8.15      Agreement
      to Arbitrate. THE PARTIES HEREBY AGREE TO WAIVE UNCONDITIONALLY AND
      IRREVOCABLY THE RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY LITIGATION THAT
      MAY AT ANY TIME, DIRECTLY OR INDIRECTLY, ARISE OUT OF OR IN CONNECTION WITH
      ANY
      ASPECT OF THE RELATIONSHIP BETWEEN JAFFE AND SVI, ITS OFFICERS, AGENTS AND
      EMPLOYEES, INCLUDING BUT NOT LIMITED TO THE TERMINATION OF JAFFE’S EMPLOYMENT,
      RIGHTS AND DUTIES AS A SHAREHOLDER, OR YOUR EMPLOYMENT WITH SVI, TO THE EXTENT
      LEGALLY ALLOWABLE. This means that both Parties irrevocably, unconditionally,
      and exclusively agree that any controversy or claim arising out of or relating
      to Jaffe’s employment which cannot be otherwise resolved pursuant to the terms
      hereof, or any dispute between the Parties, shall be resolved by binding
      arbitration in Orange County, California. The arbitration shall be administered
      by Judicial Arbitration and Mediation Services, the Company (“JAMS”), or another
      mutually agreed upon neutral service, in its Orange County office. The
      arbitrator shall be a retired Superior Court Judge of the State of California
      affiliated with JAMS. Judgment upon the award rendered by the arbitrator may
      be
      entered and enforced in any court having jurisdiction thereof. THE AWARD OF
      THE
      ARBITRATOR SHALL BE BINDING, FINAL, AND NON-APPEALABLE. The arbitrator shall
      not
      have any power to alter, amend, modify, or change any of the terms of this
      Agreement, the Employment Agreement, the Convertible Note, or the Supplemental
      Agreement, or to grant any remedy which is either prohibited by the terms of
      this Agreement or not available in a court of law. Any action brought to enforce
      the provisions of this section shall be brought in the Orange County Superior
      Court. All other questions regarding Jaffe’s employment, including but not
      limited to the interpretation, enforcement of this Agreement (other than the
      right to arbitrate), and the rights, duties and liabilities of the parties
      to
      Jaffe’s employment shall be governed by California law. The costs of the
      arbitration, including any JAMS administration fee, and arbitrator’s fee, and
      costs of the use of facilities during the hearings, shall be borne by SVI;
      however, the Parties shall be solely responsible for their own attorney’s fees
      and costs. Attorney’s fees and costs may be awarded to the prevailing party at
      the discretion of the arbitrator as part of the award. In any arbitration
      proceeding conducted pursuant to the provisions of this Agreement, both parties
      shall have the right to conduct all discovery, to call witnesses and to
      cross-examine the opposing party’s witnesses, either through legal counsel,
      expert witnesses or both, to the fullest extent allowed by California law,
      as
      though before any Court or tribunal of the State. Both Parties expressly
      understand and agree on behalf of their heirs, executors, administrators,
      successors, and assigns, that the rights being waived hereunder specifically
      include, but are not limited to, any and all civil claims in State or Federal
      Courts under (as any of the same may be amended from time to time) Title VII
      of
      the Civil Rights Act of 1964; Sections 1981 and 1983 of the Civil Rights Act
      of
      1866; Equal Pay Act; Americans with Disabilities Act; Age Discrimination in
      Employment Act; Federal or State Retirement Income Security Acts; Fair Labor
      Standards Act; Family and Medical Leave Act; WARN Act; the United States and
      California Constitutions; California Fair Employment and Housing Act; California
      Family Rights Act; California Labor Code; any applicable California Industrial
      Welfare Commission Wage Order; with respect to the foregoing constitutional
      and
      statutory references, any comparable constitution, statute or regulation of
      any
      other state; all claims of discrimination or harassment on account of race,
      sex,
      sexual orientation, national origin, religion, disability, age, pregnancy,
      veteran’s status, or any other protected status under any federal or state
      statute; any federal, state or local law enforcing express or implied employment
      contracts or covenants of good faith and fair dealing; any federal, state or
      local laws providing recourse for alleged wrongful discharge or constructive
      discharge, termination in violation of public policy, tort, physical or personal
      injury, emotional distress, fraud, negligent misrepresentation, defamation,
      and
      any similar or related claim; together with any claim under any other local,
      state or federal law or constitution governing employment, discrimination or
      harassment in employment, or the payment of wages or benefits, which each Party
      may have in any way related to Jaffe’s employment, to the extent legally
      allowable. This Agreement and the scope of the release hereunder expressly
      includes any statutory claims, including, but not limited to, claims under
      the
      Age Discrimination in Employment Act (the “ADEA”) and the Older Workers’ Benefit
      Protection Act (“OWBPA”), to the extent legally allowable. Although the
      intent of this Agreement is to benefit both Parties by mutually agreeing upon
      a
      single forum for the resolution of any and all disputes or grievances between
      them, notwithstanding the foregoing limitations, this Agreement shall not be
      interpreted to preclude or waive any Party’s available remedies under, or rights
      to, filing, submitting or hearing of matters before any of the above regulatory
      or administrative entities, commissions or boards to the extent such rights
      cannot by law be waived.

    

    8.16     Waiver
      of Trial. IN ACCORDANCE WITH THE AGREEMENT OF THE PARTIES TO
      ARBITRATE ALL DISPUTES PURSUANT TO SECTION 8.15, ABOVE, EACH PARTY HEREBY WAIVES
      TRIAL IN ANY ACTION, PROCEEDING OR COUNTER CLAIM BROUGHT BY ANY OF THEM AGAINST
      THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, OR ANY
      OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH OR THE ADMINISTRATION THEREOF
      OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN. THE PROVISIONS OF THIS SECTION
      8.16 HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THESE PROVISIONS
      SHALL
      BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED
      TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION 8.16 WILL NOT BE FULLY
      ENFORCED IN ALL INSTANCES.

    

    

    
      
        
           

        

        
          11

          
            

          

        

        
           

        

      

    

    

    8.17      Provision
      Not Construed Against Party Drafting Agreement. This Agreement is
      the result of negotiations by and between the Parties, and each Party has had
      the opportunity to be represented by independent legal counsel of its choice.
      This Agreement is the product of the work and efforts of all Parties, and shall
      be deemed to have been drafted by all Parties. In the event of a dispute, no
      Party hereto shall be entitled to claim that any provision should be construed
      against any other Party by reason of the fact that it was drafted by one
      particular Party.

    

    8.18      Recitals.
      The facts recited in Article II, above, are hereby conclusively presumed to
      be
      true as between and affecting the Parties.

    

    8.19      Best
      Efforts. The Parties shall use and exercise their best efforts,
      taking all reasonable, ordinary and necessary measures to ensure an orderly
      and
      smooth relationship under this Agreement, and further agree to work together
      and
      negotiate in good faith to resolve any differences or problems which may arise
      in the future.

    

    8.20      Definitional
      Provisions. For purposes of this Agreement, (i) those words, names,
      or terms which are specifically defined herein shall have the meaning
      specifically ascribed to them; (ii) wherever from the context it appears
      appropriate, each term stated either in the singular or plural shall include
      the
      singular and plural; (iii) wherever from the context it appears appropriate,
      the
      masculine, feminine, or neuter gender, shall each include the others; (iv)
      the
      words “hereof”, “herein”, “hereunder”, and words of similar import, when used in
      this Agreement, shall refer to this Agreement as a whole, and not to any
      particular provision of this Agreement; (v) all references to designated
“Articles”, “Sections”, and to other subdivisions are to the designated
      Articles, Sections, and other subdivisions of this Agreement as originally
      executed; (vi) all references to “Dollars” or “$” shall be construed as being
      United States dollars; (vii) the
      term “including”
      is not limiting and means “including
      without limitation”;
and,
      (viii) all references to
      all statutes, statutory provisions, regulations, or similar administrative
      provisions shall be construed as a reference to such statute, statutory
      provision, regulation, or similar administrative provision as in force at the
      date of this Agreement and as may be subsequently amended.

    

    IX

    

    EXECUTION

    

    IN
      WITNESS WHEREOF,
      this Agreement has been duly executed by the Parties, and shall be effective
      as
      of and on the Effective Date set forth in Section 1, above.

    

    THE
      PARTIES HAVE CAREFULLY READ THIS ENTIRE AGREEMENT. ITS CONTENTS AND THE RELEASE
      CONTAINED HEREIN HAVE BEEN FULLY EXPLAINED TO THEM BY THEIR ATTORNEYS, OR THEY
      HAVE VOLUNTARILY ELECTED NOT TO SEEK THE ADVICE OF AN ATTORNEY. THE PARTIES
      FULLY UNDERSTAND THE FINAL AND BINDING EFFECT OF THIS AGREEMENT. THE ONLY
      PROMISES OR REPRESENTATIONS MADE TO EACH OF THE PARTIES ABOUT THIS AGREEMENT,
      OR
      TO INDUCE THEM TO SIGN THIS AGREEMENT, ARE CONTAINED IN THIS AGREEMENT. THE
      PARTIES ARE SIGNING THIS AGREEMENT KNOWINGLY AND VOLUNTARILY, WITHOUT
      COMPULSION, COERCION, FRAUD, OR DURESS.

    

    

    
      
        
           

        

        
          12

          
            

          

        

        
           

        

      

    

    

    

    
      	
              JAFFE:

            	
              SVI:

            
	 	 
	 	
              SVI
                MEDIA, INC.,

            
	
              ___________________________

            	
              a
                Nevada corporation

            
	
              LEWIS
                JAFFE

            	 
	 	 
	
              DATED:  ___________________

            	
              BY:  ___________________________

            
	 	 
	 	
              NAME:  ________________________

            
	 	 
	 	
              TITLE: 
                 ________________________

            
	 	 
	 	
              DATED:  _______________________

            

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    13Exhibit 4.1

 

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE
UPON EXERCISE OF THESE SECURITIES HAVE 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. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

 

XENOMICS, INC.

 

WARRANT

 

	
  Warrant No.

  	
   

  	
  Original Issue Date: October 12, 2007

  

 

Xenomics, Inc.,
a Florida corporation (the “Company”),
hereby certifies that, for value received,             
or its registered assigns (the “Holder”), is
entitled to purchase from the Company up to a total of One Hundred Thousand (100,000)
shares of Common Stock (each such share, a “Warrant Share”
and all such shares, the “Warrant Shares”),
at any time and from time to time from and after the Original Issue Date and
through and including October 12, 2012 (the “Expiration
Date”), and subject to the following terms and conditions:

 

1.             Definitions. As used in this Warrant, the following terms shall have the respective
definitions set forth in this Section 1.

 

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

 

“Common Stock”
means the common stock of the Company, par value $0.0001 per share, and any
securities into which such common stock may hereafter be reclassified.

 

“Exercise Price” means
$0.50, subject to adjustment in accordance with Section 9.

 

“Fundamental Transaction”
means any of the following: (1) the Company effects any merger or consolidation
of the Company with or into another Person, (2) the Company effects any sale of
all or substantially all of its assets in one or a series of related
transactions, (3) any

 

 

 

tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (4) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property.

 

“Original Issue Date”
means the Original Issue Date first set forth on the first page of this
Warrant.

 

“New York Courts”
means the state and federal courts sitting in the City of New York, Borough of
Manhattan.

 

“Trading Day”
means (i) a day on which the Common Stock is traded on a Trading Market, or
(ii) if the Common Stock is not quoted on any Trading Market, a day on which
the Common Stock is quoted in the over-the-counter market as reported by the
Pink Sheets, LLC (or any similar organization or agency succeeding to its
functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i) and (ii) hereof, then Trading
Day shall mean a Business Day.

 

2.             Registration of Warrant. The Company shall register this Warrant upon
records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof
from time to time. The Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any exercise hereof or
any distribution to the Holder, and for all other purposes, absent actual
notice to the contrary.

 

3.             Registration of Transfers. The Company shall register the transfer of any
portion of this Warrant in the Warrant Register, upon surrender of this
Warrant, with the Form of Assignment attached hereto duly completed and signed,
to the Company at its address specified herein. Upon any such registration or
transfer, a new Warrant to purchase Common Stock, in substantially the form of
this Warrant (any such new Warrant, a “New Warrant”),
evidencing the portion of this Warrant so transferred shall be issued to the transferee
and a New Warrant evidencing the remaining portion of this Warrant not so
transferred, if any, shall be issued to the transferring Holder. The acceptance
of the New Warrant by the transferee thereof shall be deemed the acceptance by
such transferee of all of the rights and obligations of a holder of a Warrant.

 

4.             Exercise and Duration of Warrants. This Warrant shall be exercisable by the
registered Holder at any time and from time to time on or after the Original
Issue Date through and including the Expiration Date. At 6:30 p.m., New York
City time on the Expiration Date, the portion of this Warrant not exercised
prior thereto shall be and become void and of no value. The Company may not
call or redeem any portion of this Warrant without the prior written consent of
the affected Holder.

 

5.             Delivery of Warrant Shares.

 

(a)           To
effect exercises hereunder, the Holder shall not be required to physically
surrender this Warrant unless the aggregate Warrant Shares represented by this
Warrant is being exercised. Upon delivery of the Exercise Notice (in the form
attached hereto)

 

2

 

to the Company (with the attached Warrant Shares
Exercise Log) at its address for notice set forth herein and upon payment of the
Exercise Price multiplied by the number of Warrant Shares that the Holder
intends to purchase hereunder, the Company shall promptly (but in no event
later than three Trading Days after the Date of Exercise (as defined herein))
issue and deliver to the Holder, a certificate for the Warrant Shares issuable
upon such exercise, which shall include a restrictive legend. The Company
shall, upon request of the Holder and subsequent to the Effective Date, use its
reasonable best efforts to deliver Warrant Shares hereunder electronically
through the Depository Trust Corporation or another established clearing
corporation performing similar functions, if available, provided, that,
the Company may, but will not be required to change its transfer agent if its
current transfer agent cannot deliver Warrant Shares electronically through the
Depository Trust Corporation. A “Date of Exercise”
means the date on which the Holder shall have delivered to the Company: (i) the
Exercise Notice (with the Warrant Exercise Log attached to it), appropriately
completed and duly signed and (ii) payment of the Exercise Price for the number
of Warrant Shares so indicated by the Holder to be purchased.

 

(b)           The
Company’s obligations to issue and deliver Warrant Shares in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with the issuance of Warrant Shares. Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to
timely deliver certificates representing Warrant Shares upon exercise of the
Warrant as required pursuant to the terms hereof.

 

6.             Charges, Taxes and Expenses. Issuance and delivery of Warrant Shares upon
exercise of this Warrant shall be made without charge to the Holder for any
issue or transfer tax, withholding tax, transfer agent fee or other incidental
tax or expense in respect of the issuance of such certificates, all of which
taxes and expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant
Shares or Warrants in a name other than that of the Holder. The Holder shall be
responsible for all other tax liability that may arise as a result of holding
or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

 

7.             Replacement of Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary
and reasonable indemnity (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also comply with
such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe. If a New Warrant is requested
as a result of a mutilation of this

 

3

 

Warrant, then the Holder shall
deliver such mutilated Warrant to the Company as a condition precedent to the
Company’s obligation to issue the New Warrant.

 

8.             Reservation of Warrant Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued
and otherwise unreserved Common Stock, solely for the purpose of enabling it to
issue Warrant Shares upon exercise of this Warrant as herein provided, the
number of Warrant Shares which are then issuable and deliverable upon the
exercise of this entire Warrant, free from preemptive rights or any other
contingent purchase rights of Persons other than the Holder (taking into
account the adjustments and restrictions of Section 9). The Company
covenants that all Warrant Shares so issuable and deliverable shall, upon
issuance and the payment of the applicable Exercise Price in accordance with
the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable.

 

9.             Certain Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 9.

 

(a)           Stock
Dividends and Splits. If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, or (iii) combines outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after
such event. Any adjustment made pursuant to clause (i) of this paragraph shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.

 

(b)           Fundamental
Transactions. If, at any time while this Warrant is outstanding there is a
Fundamental Transaction, then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant (the “Alternate
Consideration”). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any exercise of this
Warrant following such Fundamental Transaction. At the Holder’s option and
request, any successor to the Company or surviving entity in such Fundamental
Transaction shall, either (1)

 

4

 

issue to the Holder a new warrant substantially in the
form of this Warrant and consistent with the foregoing provisions and
evidencing the Holder’s right to purchase the Alternate Consideration for the
aggregate Exercise Price upon exercise thereof, or (2) purchase the Warrant
from the Holder for a purchase price, payable in cash within five Trading Days
after such request (or, if later, on the effective date of the Fundamental
Transaction), equal to the Black Scholes value of the remaining unexercised
portion of this Warrant on the date of such request. The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions
of this paragraph (b) and insuring that the Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous
to a Fundamental Transaction.

 

(c)           Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price
pursuant to this Section 9, the number of Warrant Shares that may be purchased
upon exercise of this Warrant shall be increased or decreased proportionately,
so that after such adjustment the aggregate Exercise Price payable hereunder
for the adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment.

 

(d)           Calculations.
All calculations under this Section 9 shall be made to the nearest cent
or the nearest 1/100th of a share, as applicable. The number of
shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.

 

(e)           Notice
of Adjustments. Upon the occurrence of each adjustment pursuant to this Section
9, the Company at its expense will promptly compute such adjustment in
accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment, including a statement of the adjusted Exercise Price and
adjusted number or type of Warrant Shares or other securities issuable upon
exercise of this Warrant (as applicable), describing the transactions giving
rise to such adjustments and showing in detail the facts upon which such
adjustment is based. Upon written request, the Company will promptly deliver a
copy of each such certificate to the Holder and to the Company’s Transfer
Agent.

 

(f)            Notice
of Corporate Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common
Stock, including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of the Company or any Subsidiary,
(ii) authorizes or approves, enters into any agreement contemplating or
solicits stockholder approval for any Fundamental Transaction or (iii)
authorizes the voluntary dissolution, liquidation or winding up of the affairs
of the Company, then the Company shall deliver to the Holder a notice
describing the material terms and conditions of such transaction (but only to
the extent such disclosure would not result in the dissemination of material,
non-public information to the Holder) at least 10 calendar days prior to the
applicable record or effective date on which a Person would need to hold Common
Stock in order to participate in or vote with respect to such transaction, and
the Company will take all steps reasonably necessary in order to insure that
the Holder is given the practical opportunity to exercise this Warrant prior to
such time so as to participate in or vote with respect to such

 

5

 

transaction; provided, however, that the failure to
deliver such notice or any defect therein shall not affect the validity of the
corporate action required to be described in such notice.

 

10.           Payment of Exercise Price. This Warrant may be exercised by the Holder as
to the whole or any lesser number of the Warrant Shares covered hereby, upon
surrender of this Warrant to the Company at its principal executive office
together with the Notice of Exercise attached hereto as Exhibit A, duly
completed and executed by the Holder, and payment to the Company of the
aggregate Exercise Price for the Warrant Shares to be purchased in the form of
(i) a check made payable to the Company, (ii) wire transfer according
to the Company’s instructions or (iii) any combination of (i) and (ii).

 

11.           No Fractional Shares. No fractional shares of Warrant Shares will be
issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would, otherwise be issuable, the Company shall pay
cash equal to the product of such fraction multiplied by the closing price of
one Warrant Share as reported by the applicable Trading Market on the date of
exercise.

 

12.           Notices. Any and all notices or other communications or deliveries hereunder
(including, without limitation, any Exercise Notice) shall be in writing and
shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day
or later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the
Trading Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom
such notice is required to be given. The addresses for such communications
shall be:  (i) if to the Company, to 420
Lexington Avenue, Suite 1701, New York, New York 10170, Attn: Chief Executive
Officer, or to facsimile no.:  (212) 297-0808 (or such other address as the
Company shall indicate in writing in accordance with this Section), or
(ii) if to the Holder, to the address or facsimile number appearing on the
Warrant Register or such other address or facsimile number as the Holder may
provide to the Company in accordance with this Section.

 

13.           Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon 10
calendar days’ notice to the Holder, the Company may appoint a new warrant
agent. Any corporation into which the Company or any new warrant agent may be
merged or any corporation resulting from any consolidation to which the Company
or any new warrant agent shall be a party or any corporation to which the
Company or any new warrant agent transfers substantially all of its corporate
trust or shareholders services business shall be a successor warrant agent
under this Warrant without any further act. Any such successor warrant agent
shall promptly cause notice of its succession as warrant agent to be mailed (by
first class mail, postage prepaid) to the Holder at the Holder’s last address
as shown on the Warrant Register.

 

14.           Miscellaneous.

 

(a)           This
Warrant shall be binding on and inure to the benefit of the parties hereto and
their respective successors and assigns. Subject to the preceding sentence,
nothing in

 

6

 

this Warrant shall be construed to give to any Person
other than the Company and the Holder any legal or equitable right, remedy or
cause of action under this Warrant. This Warrant may be amended only in writing
signed by the Company and the Holder and their successors and assigns.

 

(b)           All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York (except for matters governed by
corporate law in the State of Delaware), without regard to the principles of
conflicts of law thereof. Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of this Warrant and the
transactions herein contemplated (“Proceedings”)
(whether brought against a party hereto or its respective Affiliates, employees
or agents) shall be commenced exclusively in the New York Courts. Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of the New York
Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any Proceeding, any claim that
it is not personally subject to the jurisdiction of any New York Court, or that
such Proceeding has been commenced in an improper or inconvenient forum. Each
party hereto hereby irrevocably waives personal service of process and consents
to process being served in any such 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 Warrant and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Warrant or the transactions contemplated hereby. If either
party shall commence a Proceeding to enforce any provisions of this Warrant,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its attorney’s fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.

 

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

 

(d)           In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

 

(e)           Prior
to exercise of this Warrant, the Holder hereof shall not, by reason of being a
Holder, be entitled to any rights of a stockholder with respect to the Warrant
Shares.

 

IN WITNESS WHEREOF, the Company has caused this
Warrant to be duly executed by its authorized officer as of the date first
indicated above.

 

7

 

	
   

  	
  XENOMICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

8

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