Document:

Stock Purchase Agreement

 Exhibit 10.1 
 On June 1, 2007 the Company sold its pharmacy division, Drug Depot, Inc. The transaction generated proceeds of cash of $67,000 and forgiveness of debt of $146,206 and resulted in a net loss of $42,177. 
 The following table summarizes the carrying values of the assets and liabilities of Drug Depot included in the Consolidated Balance Sheets at December 31, 2006 and
June 30, 2007: 
 The following pro forma financial information presents the results of operations of Vertical Health Solutions, Inc. as if the
disposition had occurred at January 1, 2006 and 2007. The pro forma financial information is not intended to represent or be indicative of Vertical Health Solutions, Inc. consolidated results of operations or financial condition that would have
been reported had the disposition been completed as of the beginning of the periods presented, and should not be taken as indicative of Vertical Health Solutions, Inc.’s future consolidated results of operations or financial condition.

  

							
	 	  	June 30, 2007	  	December 31, 2006
	 Assets:
	  			  		
	 Current assets
	  	$	400,518	  	$	209,538
	 Property and equipment
	  	 	24,606	  	 	14,983
	 Total assets disposed
	  	$	425,124	  	$	224,521
			
	 Liabilities:
	  			  		
	 Current liabilities
	  	$	315,947	  	$	143,144
	 Total liabilities
	  	$	315,947	  	$	143,144
			
	 Net assets
	  	$	109,177	  	$	81,377

  

												
	 	  	2006	 	 	Adjustments	 	 	Proforma
2006	 
	 Sales 
	  	$	754,914	 	 	(754,914	)	 	$	0	 
	 Cost of goods sold
	  	 	383,068	 	 	(383,068	)	 	 	0	 
		  	 	 	 	 			 	 	 	 
	 Gross profit 
	  	$	371,846	 	 			 	$	0	 
	 Operating expenses:
	  				 			 			
	 Selling, general and administrative expenses
	  	 	667,907	 	 	(536,633	)	 	 	131,274	 
		  	 	 	 	 			 	 	 	 
	 Total operating expenses
	  	 	667,907	 	 			 	 	131,274	 
		  	 	 	 	 			 	 	 	 
	 Operating loss before other income and expense 
	  	 	(296,061	)	 			 	 	(131,274	)
	 Other income (expense): 
	  				 			 			
	 Interest income
	  	 	18,050	 	 			 	 	18,050	 
	 Impairment of goodwill
	  	 	(430,000	)	 			 	 	(430,000	)
	 Derivative instrument income (expense), net
	  	 	187,873	 	 			 	 	187,873	 
	 Gain on sale of subsidiary
	  	 	192,541	 	 			 	 	192,51	 
	 Gain on extinguishment of debt
	  	 	146,455	 	 			 	 	146,455	 
	 Interest expense
	  	 	(3,533	)	 			 	 	(3,533	)
		  	 	 	 	 			 	 	 	 
	 Total other income (expense) 
	  	 	111,386	 	 			 	 	111,386	 
		  	 	 	 	 			 	 	 	 
	 Loss from continuing operations before income taxes
	  	 	(184,675	)	 			 	 	(19,888	)
	 Income taxes
	  	 	0	 	 			 	 	0	 
		  	 	 	 	 			 	 	 	 
	 Loss from continuing operations
	  	 	(184,675	)	 			 	 	(19,888	)
	 Discontinued operations
	  				 			 			
				
	 Loss from operations of Drug Depot, Inc.
	  	 	0	 	 			 	 	0	 
	 Loss on disposal of Drug Depot, Inc.
	  	 	0	 	 	(42,177	)	 	 	(42,177	)
		  	 	 	 	 			 	 	 	 
		  	 	0	 	 			 	 	(42,177	)
				
	 Preferred stock dividends
	  	 	0	 	 			 	 	0	 
		  	 	 	 	 			 	 	 	 
	 Net loss 
	  	$	(184,675	)	 			 	$	(62,065	)
		  	 	 	 	 			 	 	 	 
	 Basic and diluted loss per share
	  	 	(0.01	)	 			 	 	(0.00	)
		  	 	 	 	 			 	 	 	 

 The following is the Statement of Operations for the six months ended June 30, 2007: 
  

												
	 	  	 Six
 Months
Ended
June 30,
2007
	 	 	Adjustments	 	 	Pro Forma	 
	 Sales
	  	$	1,187,897	 	 	(1,187,897	)	 	$	0	 
	 Cost of goods sold
	  	 	527,043	 	 	(527,043	)	 	 	0	 
		  	 	 	 	 			 	 	 	 
	 Gross profit
	  	$	660,854	 	 			 	$	0	 
	 Operating expenses:
	  				 			 			
	 Selling, general and administrative expenses
	  	 	631,035	 	 	(492,462	)	 	 	138,573	 
		  	 	 	 	 			 	 	 	 
	 Total operating expenses
	  	 	631,035	 	 			 	 	138,573	 
		  	 	 	 	 			 	 	 	 
	 Operating loss before other income and expense
	  	 	29,819	 	 			 	 	(138,573	)
	 Other income (expense):
	  				 			 			
	 Interest income
	  	 	3,479	 	 			 	 	3,479	 
	 Interest expense
	  	 	(218	)	 			 	 	(218	)
		  	 	 	 	 			 	 	 	 
	 Total other income (expense)
	  	 	3,261	 	 			 	 	3,261	 
		  	 	 	 	 			 	 	 	 
	 Income from continuing operations before income taxes
	  	 	33,080	 	 			 	 	(135,312	)
	 Income taxes
	  	 	0	 	 			 	 	0	 
		  	 	 	 	 			 	 	 	 
	 Income from continuing operations
	  	 	33,080	 	 			 	 	(135,312	)
	 Discontinued operations
	  				 			 			
				
	 Loss from operations of Drug Depot, Inc.
	  	 	0	 	 			 	 	0	 
	 Loss on disposal of Drug Depot, Inc.
	  	 	(42,177	)	 			 	 	(42,177	)
		  	 	 	 	 			 	 	 	 
		  	 	(42,177	)	 			 	 	(42,177	)
				
	 Preferred stock dividends
	  	 	0	 	 			 	 	0	 
		  	 	 	 	 			 	 	 	 
	 Net loss
	  	$	(9,097	)	 			 	$	(177,489	)
		  	 	 	 	 			 	 	 	 
	 Basic and diluted loss per share
	  	 	(0.00	)	 			 	 	(0.01	)China Public Security Technology, Inc. - Exhibit 10.16 - Prepared By TNT
Filings Inc.

	 	 
	
    	
    
    21st Floor, Everbright Bank Building,

    Zhuzilin, Futian District,
    Shenzhen, Guangdong, 518040

    People’s Republic of China

    Tel.: (+86) 755 -8370-8333

    Fax: (+86) 755-8370-9333

September 12, 2007 

Shenzhen iASPEC Software Engineering Company Limited 

Unit D, Block 2, Tian An Cyber Park, Chengongmiao 

Shenzhen, Guangdong, 518040, People’s Republic Of China 

Gentlemen: 

Re: True-up Under Management Service
Agreement 

Reference is made to
that certain Management Service Agreement (the "MSA"), dated as of August
1, 2007, among Public Security Technology (PRC) Co., Ltd. ("Public Security"),
Shenzhen iASPEC Software Engineering Company Limited ("iASPEC"), and
iASPEC’s shareholders, Jiang Huai Lin and Jin Zhu Cai (together, the "iASPEC
Shareholders"), and that certain Notice of Termination, dated August 1,
2007, among Public Security, iASPEC and the iASPEC Shareholders, pursuant to
which the parties terminated the Amended and Restated Business Turnkey
Agreement, dated as of October 9, 2006 (the "Turnkey Agreement") and replaced it
with the MSA, effective as of July 1, 2007 (the "Effective Date").
Capitalized terms used, but not otherwise defined, have the meanings ascribed to
such terms in the MSA. 

Section 4 of
the MSA contains a true-up provision, pursuant to which, the parties are
required, by September 30, 2007, to calculate the cumulative net profit of
iASPEC from October 9, 2006, when iASPEC commenced its contractual relationship
with Public Security under the Turnkey Agreement, through the Effective Date,
and iASPEC is required to pay the amount due to Public Security, if there is a
net received profit, while Public Security is obligated to reimburse any amount
to iASPEC if it is there is a net loss. The parties further agree to the terms
and conditions set forth below: 

1.
iASPEC shall pay the True-up
Amount due and payable under Section 4 of the MSA, on or before December
31, 2007. 

2.
Each of the parties hereto
acknowledges and agrees that, except as specifically set forth in this letter
agreement, all of the terms and conditions of the MSA, including, but not
limited to, all the obligations of the parties shall remain unchanged, with the
same force and effect as if such matters were set forth herein. The terms and
conditions set forth in this letter agreement may not be changed except in a
writing signed by the parties hereto. 

3.
This letter agreement shall
be governed by and construed in accordance with the laws of the People’s
Republic of China, without regard to the principles of conflict of laws
thereunder. 

4.
This letter agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
and which together shall constitute one and the same instrument. 

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

If the foregoing
provisions correctly state our understanding with respect to the above matters,
please indicate your agreement by signing two copies of this letter in the space
provided below and returning one of the copies to us. 

	 	Very truly yours,
	 	 
	 	PUBLIC SECURITY
    TECHNOLOGY (PRC) CO., LTD.
	 	 
	 	 
	 	By /s/ Jiang Huai
    Lin            
    
	 	Jiang Huai Lin
	 	Director

Acknowledged this 12th day of September, 2007: 

SHENZHEN iASPEC SOFTWARE ENGINEERING COMPANY LIMITED 

By /s/ Jiang Huai Lin          

      Jiang Huai Lin 

      President 

SHAREHOLDERS 

By /s/ Jiang Huai Lin        

      Jiang Huai Lin 

By /s/ Jin Zhu Cai             

      Jin Zhu CaiExhibit 4.2

    DEAN
      HELLER

    Secretary
      of State

    206
      North Carson Street 

    Carson
      City, Nevada 89701-4299

    (775)
      684 5708

    Website:
      secretaryofstate.biz 

    

    Certificate
      of Amendment

    (PURSUANT
      TO NRS 78.380) 

     

    
      	
              USE
                BLACK INK ONLY-DO NOT HIGHLIGHT

            	
              ABOVE
                SPACE IS FOR OFFICE USE ONLY

            
	
              Certificate
                of Amendment to Articles of Incorporation

            
	
              For
                Nevada Corporations

            
	
              (Pursuant
                to NRS 78.380—Before Issuance of Stock)

            
	 
	
              1.

            	
              Name
                of corporation:

            
	 	OXFORD
              MEDIA, INC.
	 	 
	
              2.

            	
              By
                resolution of the board of directors pursuant to a provision in the
                articles of incorporation, this certificate establishes the following
                regarding the voting powers, designations, preferences, limitations,
                restrictions and relative rights of the following class or series
                of
                stock.

            
	 	
               

              The
                series of preferred stock shall be designated as Series C Convertible
                Preferred Stock (the "Preferred Stock") and the number of shares
                so
                designated shall be up to 100,000 (which shall not be subject to
                increase
                without the written consent of all the hodlers of Preferred Stock
                (each a
                "Holder", and collectively the "Holders")). Each share of Preferred
                Stock
                shall have a par value of $0.001 per share and a stated value of
                $1,000
                subject to increase set forth in Section 3(a), below (the "State
                Value").  Please see attached documents.

            
	 	 
	
              3.

            	
              Effective
                date of filing (optional):

            
	 	 
	
              4.

            	
              Officer
                Signature (Required):

            
	 	 
	 	
              X
                /s/ Lewis Jaffe

            	 	
               

            
	 	
              Signature

            	 	
               

            

    

    

    

    IMPORTANT:
      Failure to include any of the above information and submit the proper fees
      may
      cause this filing to be rejected.

    

    

    

    This
      form must be accompanied by appropriate fees. 

    Nevada
      Secretary of State Form 78 Articles 2007 

    Revised
      on: 01/01/07

     

    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    

     

    OXFORD
      MEDIA, INC.

    

    CERTIFICATE
      OF DESIGNATION OF PREFERENCES, 

    RIGHTS
      AND LIMITATIONS

    OF

    SERIES
      C CONVERTIBLE PREFERRED STOCK

    

    PURSUANT
      TO SECTION 78.1955 OF THE 

    NEVADA
      GENERAL CORPORATION LAW

    

    The
      undersigned, LEWIS JAFFE,
      does
      hereby certify that:

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    TERMS
      OF PREFERRED STOCK

    

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

    

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

    

    "Automatic
      Conversion Effective Date"
      shall
      have the meaning set forth in Section 8.

     

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

    

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

    

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

    

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

    

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

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

    

    “Commission”
means
      the Securities and Exchange Commission.

    

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

    

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

    

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

    

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

    

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

    

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

    

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

     

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

    

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

     

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

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

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

     

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

    

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

    

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

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

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

     

    "Forced
      Conversion Date" shall have a meaning
      set forth in Section 8.

     

    "Forced
      Conversion Notice" shall have a
      meaning set forth in Section 8.

     

    "Forced
      Conversion Notice Date" shall have a
      meaning set forth in Section 8.

     

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

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

     

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

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

    

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

    

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

    

    Section
      2.
       Designation,
      Amount and Par Value.
      The
      series of preferred stock shall be designated as its Series C Convertible
      Preferred Stock (the “Preferred
      Stock”)
      and
      the number of shares so designated shall be up to 100,000 (which shall not
      be
      subject to increase without the written consent of all of the holders of the
      Preferred Stock (each, a “Holder”
and
      collectively, the “Holders”)).
      Each
      share of Preferred Stock shall have a par value of $0.001 per share and a stated
      value equal to $1,000, subject to increase set forth in Section 7(a)
      below
      (the “Stated
      Value”).

     

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

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

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

    

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

    

    Section
      6.
       Conversion.

    

    a)  Conversions
      at Option of Holder.
      Subject
      to the limitations set forth in Section 6(c) and Section 6(d)
      and
      subject further to the automatic conversion provisions of Section 8,
      each
      share of Preferred Stock shall be convertible, at any time and from time to
      time
      from and after the Original Issue Date at the option of the Holder thereof,
      into
      that number of shares of Common Stock determined by dividing the Stated Value
      of
      such share of Preferred Stock by the Conversion Price. Holders shall effect
      conversions
      under
      this Section 6
      by
      providing
      the
      Corporation with the form of conversion notice attached hereto as Annex
      A
      (a
“Notice
      of Conversion”).
      Each
      Notice of Conversion shall specify the number of shares of Preferred Stock
      to be
      converted, the number of shares of Preferred Stock owned prior to the conversion
      at issue, the number of shares of Preferred Stock owned subsequent to the
      conversion at issue and the date on which such conversion is to be effected,
      which date may not be prior to the date the applicable Holder delivers by
      facsimile such Notice of Conversion to the Corporation (such date, the
“Conversion
      Date”).
      If no
      Conversion Date is specified in a Notice of Conversion, the Conversion Date
      shall be the date that such Notice of Conversion to the Corporation is deemed
      delivered hereunder. The calculations and entries set forth in the Notice of
      Conversion shall control in the absence of manifest or mathematical error.
      To
      effect conversions of shares of Preferred Stock, a Holder shall not be required
      to surrender the certificate(s) representing such shares of Preferred Stock
      to
      the Corporation unless all of the shares of Preferred Stock represented thereby
      are so converted, in which case such Holder shall deliver the certificate
      representing such shares of Preferred Stock promptly following the Conversion
      Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed
      in accordance with the terms hereof shall be canceled and shall not be
      reissued.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

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

     

    c)  Conversion
      Price.
      The
      conversion price for the Preferred Stock shall equal $0.025,
      subject
      to adjustment herein (the “Conversion
      Price”).

    

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

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    e)  Issuance
      Limitations.
      Notwithstanding anything herein to the contrary, if the Corporation has not
      approved
      an
      Authorized Share Reverse
      Action,
      then the Corporation may not issue, upon conversion of the Preferred
      Stock
      pursuant
      to this Section 6,
      a number
      of shares of Common Stock which would in
      the
      aggregate exceed
      _______1
      shares
      of Common Stock (such number of shares, the “Issuable
      Maximum”).
      In
      such
      case, any Holder exercising its conversion rights pursuant to this Section
      6
      shall
      be
      entitled to a portion of the Issuable Maximum equal to the quotient obtained
      by
      dividing (x) the original Stated Value of such Holder’s Preferred Stock by (y)
      the aggregate Stated Value of all Preferred Stock issued on the Original Issue
      Date to all Holders.

    

    f)  Mechanics
      of Conversion

    

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

     

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

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

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

     

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

    

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

    

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

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    Section
      7.
       Certain
      Adjustments.

    

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

     

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

     

    c)  Subsequent
      Rights Offerings.
      If the
      Corporation, at any time prior
      to
      the Automatic Conversion Effective Date,
      shall
      issue rights, options or warrants to all holders of Common Stock (and not to
      Holders) entitling them to subscribe for or purchase shares of Common Stock
      at a
      price per share that is lower than the VWAP on the record date referenced below,
      then the Conversion Price shall be multiplied by a fraction of which the
      denominator shall be the number of shares of the Common Stock outstanding on
      the
      date of issuance of such rights or warrants plus the number of additional shares
      of Common Stock offered for subscription or purchase, and of which the numerator
      shall be the number of shares of the Common Stock outstanding on the date of
      issuance of such rights or warrants plus the number of shares which the
      aggregate offering price of the total number of shares so offered (assuming
      delivery to the Corporation in full of all consideration payable upon exercise
      of such rights, options or warrants) would purchase at such VWAP. Such
      adjustment shall be made whenever such rights or warrants are issued
      prior to
      the Automatic Conversion Effective Date,
      and
      shall become effective immediately after the record date for the determination
      of stockholders entitled to receive such rights, options or
      warrants.
      The
      provisions of this Section 9(c) shall terminate on the Automatic Conversion
      Date
      and shall not thereafter be available to any Holder. 

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    d)  Pro
      Rata Distributions.
      If the
      Corporation, at any time while prior
      to
      the Automatic Conversion Effective Date,
      distributes to all holders of Common
      Stock
      (and not to Holders) evidences of its indebtedness or assets (including cash
      and
      cash dividends) or rights or warrants to subscribe for or purchase any security
      (other than Common Stock, which shall be subject to Section 7(b)), then in
      each
      such case the Conversion Price shall be adjusted by multiplying such Conversion
      Price in effect immediately prior to the record date fixed for determination
      of
      stockholders entitled to receive such distribution by a fraction of which the
      denominator shall be the VWAP determined as of the record date mentioned above,
      and of which the numerator shall be such VWAP on such record date less the
      then
      fair market value at such record date of the portion of such assets, evidence
      of
      indebtedness or rights or warrants so distributed applicable to one outstanding
      share of the Common Stock as determined by the Board of Directors of
      the
      Corporation in good faith. In either case the adjustments shall be described
      in
      a statement delivered to the Holders describing the portion of assets or
      evidences of indebtedness so distributed or such subscription rights applicable
      to one share of Common Stock. Such adjustment shall be made whenever any such
      distribution is made prior
      to
      the Automatic Conversion Effective Date and
      shall
      become effective immediately after the record date mentioned above.
      The
      provisions of this Section 9(d) shall terminate on the Automatic Conversion
      Effective Date and shall not thereafter apply to any Holder.

    

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

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

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

    

    g)  Notice
      to the Holders.

    

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

     

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

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    Section
      8.
       Automatic
      Conversion. 
      Notwithstanding
      anything herein to the contrary, if after the Effective
      Date (1) the
      VWAP
      for
      each
      of any
      22
consecutive
      Trading Day
      period, which 22
      consecutive Trading Day period shall have
      commenced
      only
      after
      the
      later of the Shareholder Approval Date and the Effective Date ('''Threshold
      Period"). exceeds $0.05, subject to adjustment for reverse and
      forward
      stock splits, stock dividends, stock combinations and
      other
      similar
      transactions of the Conunon Stock that occur after the Original
Issue
      Date and (ii)
      the
      volume
      for
      each
      Trading Day during any Threshold
      Period
      exceeds that nnniber of
      shares
      of
      Common Stock per Trading Day which
      is
      one
      percent (1%) of then issued and
      outstanding
      shares of
      Common
      Stock, the Corporation may,
      within 1 Trading
      Day after the end of any such Threshold Period, deliver a written notice
to
      all
      Holders (a "Forced Conversion Notice" and the date such notice is delivered
      to
      all Holders, the ("Forced Conversion Notice Date") to cause each Holder
to
      convert
      all or part of such Holder's Preferred Stock (as specified in such Forced
Conversion
      Notice)
      plus all accrued but unpaid dividends thereon
      and
      all
      liquidated damages and other amounts due in
      respect
      of the Preferred Stock pursuant to Section
      6,
      it
      being agreed
      that
      the
"Conversion
      Date"
      for
      purposes
      of Section 6 shall
      be
      doomed
      to occur on the third Trading Day following
      the
      Forced Conversion
      Notice
      Date (such third Trading Day, the "Forced
      Conversion Date'').
      The Corporation may not deliver a Forced Conversion Notice, and any Forced
      Conversion Notice delivered by the Corporation shall not be effective, unless
      all
      of
      the
      Equity Conditions have been met on each Trading Day
      during
      the applicable Threshold Period through and including the later of the Forced
      Conversion
      Date
      and
      the Trading Day after the date
      that
      the
      Conversion
      Shares issuable pursuant to such conversion are actually delivered to
the
      Holders
      pursuant to the Forced
      Conversion
      Notice.
      Any Forced
      Conversion Notices shall be applied ratably to all of the Holders based on
      each
      Holder's initial
      purchases
      of Preferred Stock hereunder, provided that any
      voluntary
      conversions by
      a
      Holder
      shall be
      applied
      against such Holder's pro rata allocation hereby decreasing
      the
      aggregate amount
      forcibly
      converted
      hereunder
      if
      less
      than
      all shares of the Preferred Stock are forcibly converted, For purposes of
      c1arification, a Forced Conversion shall be subject to all of the provisions
      of
      Section 6, including, without
      limitation,
      the provisions (i)
      requiring
      payment of liquidated
      damages and limitations on
      conversions;
      (ii)
      prohibiting
      a conversion of any
      portion
      of the Preferred Stock, to the
      extent
      that, after
      giving
      erIect to the conversion, such
      Holder
      (together
      with
      such
      Holder's Affiliates, and any
      other
      person or
      entity
      acting as a group together with
      such
Holder
      or
      any
      of
such
      Holder's
      AffIliates) would beneficially own in
      exceSS
      of
      the
      Beneficial Ownership Limitation; and, (iii)
      indictating
      that
      the
      redemption, liquidation, consent, dividend, and other
      rights
      and preferences
      of
      Holders of the Preferred Shares (other than voting rights, which
      shall
      not
      be
      affected
      by
      the
      automatic
      conversion)
      shall
      be
      eliminated or
      limited
      as specifica11y
      set forth
      herein
      upon
      a
conversion
      up
      to the
Holder's
      Beneficial
      Ownership
      Limitation.
      

     

    Section
      9.
       Redemption
      Upon Triggering Events.

     

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

    

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

     

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

    

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

    

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

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

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

    

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

    

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

    

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

    

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

    

    x.  there
      shall have occurred a Bankruptcy Event; 

    

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

    

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

    

    b)  If
      a
      Triggering Event
      occurs
      prior to the Automatic Conversion Date,
      each
      Holder shall (in addition to all other rights it may have hereunder
      or under applicable law) have the right to require the Corporation to redeem
      all
      of the Preferred Stock then held by such Holder for a redemption price, in
      cash,
      equal to the Triggering Redemption Amount. The Triggering Redemption Amount
      shall be due and payable or issuable within five Trading Days of the date on
      which the notice for the payment therefor is provided by a Holder (the
“Triggering
      Redemption Payment Date”).
      If
      the Corporation fails to pay in full the Triggering Redemption Amount hereunder
      on the date such amount is due in accordance with this Section, the Corporation
      will pay interest thereon at a rate equal to the lesser of 18% per annum or
      the
      maximum rate permitted by applicable law, accruing daily from such date until
      the Triggering Redemption Amount, plus all such interest thereon, is paid in
      full. For
      purposes of this Section, a share of Preferred Stock is outstanding until such
      date as the applicable Holder shall have been paid the Triggering Redemption
      Amount in cash.
      The
      redemption rights set out in this Section 9 shall terminate on the Automatic
      Conversion Date and shall not thereafter apply to any Holder. 

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

    Section
      10.
       Negative
      Covenants.
      Prior
      to
      the Automatic Conversion Date,
      unless
      the holders of 100% of the then outstanding shares of Preferred Stock
shall
      have otherwise given prior written consent, the Corporation shall not, and
      shall
      not permit any of its subsidiaries (whether or not a Subsidiary on the Original
      Issue Date) to, directly or indirectly:

    

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

     

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    The
      provisions of this Section 10 shall terminate on the Automatic Conversion
      Effective Date and shall not thereafter apply to any Holder.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

    Section
      11. Miscellaneous.
      

    

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

     

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

     

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

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

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

     

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

     

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

    

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

    

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

    

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

    

    

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

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

    

    IN
      WITNESS WHEREOF, the undersigned have executed this Certificate this 15th day
      of
July
      2007.

    

    
      	
               

            	
              /s/
                Lewis Jaffe

              Name:
                Lewis Jaffe

              Title:
                Chief Executive Officer/President

            

    

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    ANNEX
      A

    

    NOTICE
      OF
      CONVERSION

    

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

    

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

    

    Conversion
      calculations:

    

    
      	
              Date
                to Effect Conversion:
                _____________________________________________

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

            
	
              Number
                of shares of Preferred Stock to be Converted:
                ________________________

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

            
	
              Number
                of shares of Common Stock to be Issued:
                ___________________________

            
	
              Applicable
                Conversion
                Price:____________________________________________

            
	
              Number
                of shares of Preferred Stock subsequent to Conversion:
                ________________

            
	
              Address
                for Delivery: ______________________

              or

              DWAC
                Instructions:

              Broker
                no: _________

              Account
                no: ___________

            
	
               

              [HOLDER]

               

              By:___________________________________

              Name:

              Title:

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