EXTENSION AGREEMENT
PALISADES
MASTER FUND LP
and
June
30, 2006
I
PARTIES
THIS
EXTENSION AGREEMENT (the
“Agreement”) is
entered into effective as of the 30th
day of
June 2006 (the “Effective Date”), by and between PALISADES MASTER FUND LP
(“Palisades”); and,
OXFORD
MEDIA, INC., a Nevada corporation (“OXMI”). OXMI and Palisades are sometimes
referred to collectively herein as the “Parties”, and each individually as a
“Party”.
II
RECITALS
A. Palisades
and OXMI are parties to that certain Bridge Loan Agreement dated as of the
in
February 2006 (the “Bridge Loan Agreement”), Extension Agreement dated in June
2006 (the “Extension Agreement”) and the Exchange Agreement dated June 30, 2006
(the “Exchange Agreement”). In connection with the Bridge Loan Agreement OXMI
issued its promissory note in the principal amount of $1,666,667.00 in favor
of
Palisades (the “Note”). The Bridge Loan Agreement, the Note, the Extension
Agreement, Exchange Agreement and all other agreements delivered by OXMI in
connection with the Bridge Loan Agreement are collectively referred to herein
as
the “Loan Agreements”.
B. Payment
of all amounts owing under the Loan Agreements (the “Required Amount”) is to be
paid in full by OXMI to Palisades on July 3, 2006 (the “Due Date”), with payment
being made any time thereafter constituting an Event of Default under the Loan
Agreements
C. Palisades
is willing to extend (i) $666,667.00 of principal amount, (ii) plus interest
of
Note, and (iii) $16,667.68 of liquidated damages, for the limited period of
time
provided hereunder, the Due Date for the payment of Required Amount, provided
that OXMI complies with the terms of this Agreement. The balance of the Note
will be exchanged for a new note pursuant to the Exchange Agreement.
D. NOW,
THEREFORE,
in
consideration of the promises and the mutual covenants contained herein, and
for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Parties, intending to be legally bound, hereby agree
as
follows:
III
DEFINED
TERMS AND INTERPRETATION
3.1 Defined
Terms in Loan Agreements.
All
capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Loan Agreements.
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3.2 Defined
Terms in Agreement.
The
following capitalized terms shall have the respective meanings specified in
this
Article III. Other terms defined elsewhere herein shall have meanings so given
them.
3.2.1. Extension
Date.
“Extension
Date” means the earlier of (i) July 20, 2006; and (ii) the closing of a
transaction with SVI.
3.2.2. Forbearance
Default.
“Forbearance Default” means (a) the occurrence of any Event of Default under the
Loan Agreements other than the extension granted hereunder; (b) the failure
of
OXMI to comply with any term, condition, or covenant set forth in this
Agreement; (c) any representation made by OXMI under or in connection with
this
Agreement shall prove to be materially false or misleading as of the date when
made; or, (d) the filing of any petition (voluntary or involuntary) under the
insolvency or bankruptcy laws of the United States or any state thereof, with
respect to OXMI, any of its Affiliates, or any of its subsidiaries.
3.2.3. Obligations.
“Obligations” means each and every of the obligations of OXMI under the Loan
Agreements,
which
obligations include without limitation payment and performance of OXMI’s
obligations under the Note.
3.2.4. Securities
Act.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
3.2.5. Termination
Date.
“Termination Date” means the earlier to occur of (i) the Extension Date; or,
(ii) the date upon which a Forbearance Default occurs.
3.3 Interpretation.
3.3.1. Provision
Not Construed Against Party Drafting Agreement.
This
Agreement is the result of negotiations by and between the Parties, and each
Party has had the opportunity to be represented by independent legal counsel
of
its choice. This Agreement is the product of the work and efforts of all
Parties, and shall be
deemed
to have been drafted by all Parties. In the event of a dispute, no Party hereto
shall be entitled to claim that any provision should be construed against any
other Party by reason of the fact that it was drafted by one particular
Party.
3.3.2. Number
and Gender.
Wherever
from the context it appears appropriate, (i) each term stated either in the
singular or plural shall include the singular and plural; and, (ii) wherever
from the context it appears appropriate, the masculine, feminine, or neuter
gender, shall each include the others.
3.3.3. Incorporation
of Exhibits and Schedules.
The
Exhibits and Schedules identified in this Agreement are incorporated herein
by
reference and made a part hereof as if set out in full herein.
3.3.4. Article
and Section Headings.
The
article and section headings used in this Agreement are inserted for convenience
and identification only and are not to be used in any manner to interpret this
Agreement.
2
3.3.5. Severability.
Each
and every provision of this Agreement is severable and independent of any other
term or provision of this Agreement. If any term or provision hereof is held
void or invalid for any reason by a court of competent jurisdiction, such
invalidity shall not affect the remainder of this Agreement.
3.3.6. Entire
Agreement.
This
Agreement, and all references, documents, or instruments referred to herein,
contains the entire agreement and understanding of the Parties hereto in respect
to the subject matter contained herein. The Parties have expressly not relied
upon any promises, representations, warranties, agreements, covenants, or
undertakings, other than those expressly set forth or referred to herein. This
Agreement supersedes any and all prior written or oral agreements,
understandings, and negotiations between the Parties with respect to the subject
matter contained herein.
3.4 Additional
Definitions
and Interpretation Provisions.
For
purposes of this Agreement, (i) those words, names, or terms which are
specifically defined herein shall have the meaning specifically ascribed to
them; (ii); the words “hereof”, “herein”, “hereunder”, and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole,
and not to any particular provision of this Agreement; (iii) all references
to
designated “Articles”, “Sections”, and to other subdivisions are to the
designated Articles, Sections, and other subdivisions of this Agreement as
originally executed; (iv) all references to “Dollars” or “$” shall be construed
as being United States dollars; (v) the
term
“including” is not limiting and means “including without limitation”;
and,
(vi)
all references to all statutes, statutory provisions, regulations, or similar
administrative provisions shall be construed as a reference to such statute,
statutory provision, regulation, or similar administrative provision as in
force
at the date of this Agreement and as may be subsequently amended.
IV
CONFIRMATION
OF OBLIGATIONS AND NEW COVENANTS
4.1 Absence
of Certain Rights.
OXMI
hereby acknowledges and agrees that as of the Effective Date, OXMI does
not
have any offsets, defenses or claims against Palisades,
affiliates, officers, directors, employees, agents, attorneys, predecessors,
successors or assigns whether asserted or unasserted. OXMI
and
each of its respective successors, assigns, parents, subsidiaries, affiliates,
predecessors, employees, agents, heirs, executors, as applicable, jointly and
severally, release and forever discharge Palisades,
affiliates, officers, directors, employees, agents, attorneys, predecessors,
successors and assigns, both present and former (collectively the “Palisades
Affiliates”) of and from any and all manner of action and actions, cause and
causes of action, suits, debts, controversies, damages, judgments, executions,
claims and demands whatsoever, asserted or unasserted, in law or in equity
which
against Palisades
and/or Palisades Affiliates they ever had, now have or which any of OXMI’s
successors, assigns, parents, subsidiaries, affiliates, predecessors, employees,
agents, heirs, executors, as applicable, both present and former ever had or
now
has, upon or by reason of any manner, cause, causes or thing whatsoever,
including, without limitation, any presently existing claim or defense whether
or not presently suspected, contemplated or anticipated. The
provision of this Section 4.1 shall survive the termination of this Agreement,
Loan Agreements, and the payment in full of the Obligations.
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4.2 Continued
Effectiveness.
Except
as otherwise expressly set forth in this Agreement, the terms of each of the
Loan Agreements remain unchanged, and all such Loan Agreements shall remain
in
full force and effect and are hereby confirmed and ratified. OXMI shall continue
to perform and observe all terms and conditions of each of the Loan Agreements.
4.3 No
Novation.
This
Agreement shall not be deemed or construed to be a satisfaction, reinstatement,
novation, or release of any of the Loan Agreements, or, except as otherwise
expressly provided herein, a waiver by Palisades of any of its rights or
remedies under any of the Loan Agreements, at law or in equity.
4.4 Reaffirmation.
OXMI
hereby reaffirms each and every covenant, condition, obligation, and provision
set forth in each of the Loan Agreements, as modified under this
Agreement.
4.5 Reimbursement.
OXMI
agrees to
pay to
Palisades
upon demand (a) an amount equal to any and all out-of-pocket costs or expenses
(including legal fees) incurred or sustained by Palisades
in connection with the preparation and negotiation of this Agreement and all
related matters; and (b) from time to time after the Termination Date, any
and
all out-of-pocket costs, fees and expenses (including legal fees) and reasonable
consulting, accounting, appraisal and other similar professional fees and
expenses) hereafter incurred or sustained by Palisades
in connection with the preservation of or enforcement of any rights of
Palisades
under this Agreement, or in respect of any of OXMI’s obligations to
Palisades, all of which shall be deemed reasonable.
4.7 Other
Covenants.
OXMI
agrees that it shall comply with the following covenants, any breach of which
shall constitute an immediate Forbearance Default:
a. OXMI
shall pay
to
Palisades principal in the amount of $666,667.00 no later than July 20,
2006.
b. OXMI
shall pay to Palisades all accrued and unpaid interest on the amount of $666,667
no later than July 20, 2006.
c. OXMI
shall pay to Palisades all liquidated damages in the amount of $16,666.68 no
later than July 20, 2006.
d. OXMI
hereby agrees to lower
the
conversion price on the Series A Convertible Preferred Stock issued to Palisades
by OXMI from $1.50 to $1.00.
e. OXMI
shall file a Form 8-K with the Securities and Exchange Commission No later
than
12:00 pm, Wednesday July 5, 2006 disclosing the terms of Loan
Agreements.
f.
OXMI
shall pay to Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP legal fees in the amount of
$2,000 no later than July 20, 2006.
g. OXMI
shall file a registration statement as required by its next round of financing
but in no event later than September 20, 2006 covering the additional shares
of
common stock as required by the Registration Rights Agreement relating to the
Series A Convertible Preferred Stock held by Palisades.
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V
AGREEMENT
TO EXTEND
5.1 Extension.
Provided that no Forbearance Default occurs, Palisades hereby agrees to refrain
through the Termination Date from exercising any of its rights and remedies
under any of the Loan Agreements that may exist solely by virtue of the granting
of the Extension Date.
5.2 Retained
Rights.
Except
as expressly provided herein, the execution and delivery of this Agreement
shall
not: (a) constitute an extension, modification, or waiver of any aspect of
any
of the Loan Agreements; (b) extend the terms of any of the Loan Agreements
or
the due date of any of the Obligations; (c) give rise to any obligation on
the
part of Palisades to extend, modify, or waive any term or condition of any
of
the Loan Agreements; (d) give rise to any defenses or counterclaims to the
right
of Palisades to compel payment of the Obligations or to otherwise enforce their
rights and remedies under the Loan Agreements; or, (e) establish a custom or
course of dealing between or among OXMI and Palisades. Except as expressly
limited herein, Palisades hereby expressly reserves all of its rights and
remedies under the Loan Agreements and under applicable law.
VI
REPRESENTATIONS
AND WARRANTIES
6.1 OXMI.
OXMI
hereby represents
and warrants to Palisades as follows as of the Effective Date:
(a) The
execution, delivery, and performance of this Agreement by OXMI is within OXMI’s
corporate power and has been duly authorized by all necessary corporate
action.
(b) This
Agreement constitutes a valid and legally binding agreement enforceable against
OXMI in accordance with its terms subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, and other laws affecting creditors’ rights
generally and to general equitable principals.
(c) Each
of
the Loan Agreements constitutes a valid and legally binding obligation of OXMI,
enforceable against OXMI in accordance with the terms thereof subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, and other laws
affecting creditors’ rights generally and to general equitable
principals.
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VII
NOTICES
All
notices, requests, demands and other communications required or permitted to
be
given hereunder shall be effected pursuant to Section 8.10, below, to the
addresses provided under the Bridge Loan Agreement.
VIII
ADDITIONAL
PROVISIONS
8.1 Executed
Counterparts.
This
Agreement may be executed in any number of original, fax, electronic, or copied
counterparts, and all counterparts shall be considered together as one
agreement. A faxed, electronic, or copied counterpart shall have the same force
and effect as an original signed counterpart. Each of the Parties hereby
expressly forever waives any and all rights to raise the use of a fax machine
or
E-Mail to deliver a signature, or the fact that any signature or agreement
or
instrument was transmitted or communicated through the use of a fax machine
E-Mail, as a defense to the formation of a contract.
8.2 Successors
and Assigns.
Except
as expressly provided in this Agreement, each and all of the covenants, terms,
provisions, conditions and agreements herein contained shall be binding upon
and
shall inure to the benefit of the successors and assigns of the Parties
hereto.
8.3 Governing
Law.
This
Agreement shall be governed by the laws of the State of New York, without giving
effect to any choice or conflict of law provision or rule (whether of the State
of New York or any other jurisdiction) that would cause the application of
the
laws of any jurisdiction other than the State of New York.
8.4 Additional
Documentation.
The
Parties hereto agree to execute, acknowledge, and cause to be filed and
recorded, if necessary, any and all documents, amendments, notices, and
certificates which may be necessary or convenient under the laws of the State
of
New York.
8.5 Attorney’s
Fees.
If any
legal action (including arbitration) is necessary to enforce the terms and
conditions of this Agreement, the prevailing Party shall be entitled to costs
and reasonable attorney’s fees.
8.6 Amendment.
This
Agreement may be amended or modified only by a writing signed by all
Parties.
8.7 Remedies.
8.7.1. Specific
Performance.
The
Parties hereby declare that it is impossible to measure in money the damages
which will result from a failure to perform any of the obligations under this
Agreement. Therefore, each Party waives the claim or defense that an adequate
remedy at law exists in any action or proceeding brought to enforce the
provisions hereof.
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8.7.2. Cumulative.
The
remedies of the Parties under this Agreement are cumulative and shall not
exclude any other remedies to which any person may be lawfully
entitled.
8.8 Waiver.
No
failure by any Party to insist on the strict performance of any covenant, duty,
agreement, or condition of this Agreement or to exercise any right or remedy
on
a breach shall constitute a waiver of any such breach or of any other covenant,
duty, agreement, or condition. No
course
of dealing between the Parties, nor any failure to exercise, nor any delay
in
exercising, any right, power or privilege of either Party shall operate as
a
waiver thereof, nor shall any single or partial exercise of any right, power,
or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
8.9 Assignability.
This
Agreement is not assignable by either Party without the expressed written
consent of all Parties.
8.10
Notices.
All
notices, requests and demands hereunder shall be in writing and delivered by
hand, by facsimile transmission, by E-Mail, by mail, by telegram, or by
recognized commercial over-night delivery service (such as Federal Express,
UPS,
or DHL), and shall be deemed given (a) if by hand delivery, upon such delivery;
(b) if by facsimile transmission, upon telephone confirmation of receipt of
same; (c) if by E-Mail, upon telephone confirmation of receipt of same; (d)
if
by mail, forty-eight (48) hours after deposit in the United States mail, first
class, registered or certified mail, postage prepaid; (e) if by telegram, upon
telephone confirmation of receipt of same; or, (f) if by recognized commercial
over-night delivery service, upon such delivery.
8.11
Time.
All
Parties agree that time is of the essence as to this Agreement.
IX
EXECUTION
IN
WITNESS WHEREOF,
this
FORBEARANCE AGREEMENT has been duly executed by the Parties, and shall be
effective as of and on the Effective Date set forth in Article I of this
Agreement.
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PALISADES:
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OXMI:
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PALISADES
MASTER FUND LP
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BY:
__________________________________
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BY:
__________________________________
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NAME:
_______________________________
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NAME:
_______________________________
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TITLE:
_______________________________
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TITLE:
_______________________________
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DATED:
______________________________
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DATED:
______________________________
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