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THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO OXFORD MEDIA, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

Principal Amount $1,000,000
Issue Date: August 4, 2006

SECURED PROMISSORY NOTE

FOR VALUE RECEIVED, OXFORD MEDIA, INC., a Nevada corporation (hereinafter called
“Borrower”), hereby promises to pay to PALISADES MASTER FUND, LP, Fax:
678-353-2188 (the “Holder”) or its registered assigns or successors in interest
or order, without demand, the sum of ONE MILLION DOLLARS ($1,000,000.00)
(“Principal Amount”), with simple and unpaid interest thereon, at the “Maturity
Date”, as defined below, if not sooner paid.

This Note has been entered into pursuant to the terms of a Subscription
Agreement between the Borrower and the Holder (the “Subscription Agreement”),
and shall be governed by the terms of such Subscription Agreement. Unless
otherwise separately defined herein, all capitalized terms used in this Note
shall have the same meaning as is set forth in the Subscription Agreement. The
following terms shall apply to this Note:

ARTICLE I

INTEREST; REPAYMENT

1.1  Payment Grace Period. The Borrower shall have a ten (10) business day grace
period to pay any monetary amounts due under this Note, after which grace period
and during the pendency of an Event of Default (as defined in Article III) a
default interest rate of twenty five percent (25%) per annum shall apply to the
amounts owed hereunder.

1.2  Interest Rate. Simple interest payable on this Note shall accrue at the
annual rate of eighteen percent (18%). Interest will be payable on the Maturity
Date, accelerated or otherwise, when the principal and remaining accrued but
unpaid interest shall be due and payable, or sooner as described below.

1.3  Maturity Date. The term “Maturity Date” means the earliest to occur of (i)
ninety days after the Issue Date of this Note; or, (ii) the Closing of the SVI
Acquisition. Borrower shall not close the SVI Acquisition unless the redemption
and repayment in full of all amounts then due under this Note is an express and
mandatory condition to such closing.

ARTICLE II

OPTIONAL REDEMPTION

 Provided an Event of Default or an event which with the passage of time or the
giving of notice could become an Event of Default has not occurred, whether or
not such Event of Default has been cured, the Borrower will have the option of
prepaying the outstanding Principal amount of this Note (“Optional Redemption”)
and accrued interest, in whole or in part, by paying to the Holder a sum of
money equal to the Principal amount to be redeemed, together with accrued but
unpaid interest thereon and any and all other sums due, accrued or payable to
the Holder arising under this Note or any Transaction Document through the
Redemption Payment Date as defined below (the “Redemption Amount”). Borrower’s
election to exercise its right to prepay must be by notice in writing (“Notice
of Redemption”). The Notice of Redemption shall specify the date for such
Optional Redemption (the “Redemption Payment Date”), which date must be not
later than ten (10) business days after the date of the Notice of Redemption
(the “Redemption Period”). On the Redemption Payment Date, the Redemption Amount
shall be paid in good funds to the Holder. In the event the Borrower fails to
pay the Redemption Amount on the Redemption Payment Date as set forth herein,
then (i) such Notice of Redemption will be null and void, (ii) Borrower will not
have the right to deliver another Notice of Redemption, and (iii) Borrower’s
failure may be deemed by Holder to be a non-curable Event of Default.

 
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ARTICLE III

SECURITY INTEREST

This Note is secured by a security interest granted to the Collateral Agent for
the benefit of the Holder pursuant to a Security Agreement, as delivered by
Borrower to Holder. The Borrower acknowledges and agrees that should a
proceeding under any bankruptcy or insolvency law be commenced by or against the
Borrower, or if any of the Collateral (as defined in the Security Agreement)
should become the subject of any bankruptcy or insolvency proceeding, then the
Holder should be entitled to, among other relief to which the Holder may be
entitled under the Transaction Documents and any other agreement to which the
Borrower and Holder are parties (collectively, “Loan Documents”) and/or
applicable law, an order from the court granting immediate relief from the
automatic stay pursuant to 11 U.S.C. Section 362 to permit the Holder to
exercise all of its rights and remedies pursuant to the Loan Documents and/or
applicable law. TO THE EXTENT PERMITTED BY LAW, THE BORROWER EXPRESSLY WAIVES
THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C. SECTION 362. FURTHERMORE,
THE BORROWER EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION
362 NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE
(INCLUDING, WITHOUT LIMITATION, 11 U.S.C. SECTION 105) SHALL STAY, INTERDICT,
CONDITION, REDUCE OR INHIBIT IN ANY WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY
OF ITS RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW. The
Borrower hereby consents to any motion for relief from stay that may be filed by
the Holder in any bankruptcy or insolvency proceeding initiated by or against
the Borrower and, further, agrees not to file any opposition to any motion for
relief from stay filed by the Holder. The Borrower represents, acknowledges and
agrees that this provision is a specific and material aspect of the Loan
Documents, and that the Holder would not agree to the terms of the Loan
Documents if this waiver were not a part of this Note. The Borrower further
represents, acknowledges and agrees that this waiver is knowingly, intelligently
and voluntarily made, that neither the Holder nor any person acting on behalf of
the Holder has made any representations to induce this waiver, that the Borrower
has been represented (or has had the opportunity to he represented) in the
signing of this Note and the Loan Documents and in the making of this waiver by
independent legal counsel selected by the Borrower and that the Borrower has
discussed this waiver with counsel.

ARTICLE IV

EVENTS OF DEFAULT

The occurrence of any of the following events of default (“Event of Default”)
shall, at the option of the Holder hereof, make all sums of principal and
interest then remaining unpaid hereon and all other amounts payable hereunder
immediately due and payable, upon demand, without presentment, or grace period,
all of which hereby are expressly waived, except as set forth below:

 
 
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4.1  Failure to Pay Principal or Interest. The Borrower fails to pay any
installment of Principal Amount, interest or other sum due under this Note or
any Transaction Document when due and such failure continues for a period of
five (5) business days after the due date, including all extensions under
Section 1.1, above.

4.2  Breach of Covenant. The Borrower breaches any material covenant or other
term or condition of the Subscription Agreement, this Note or other Transaction
Document in any material respect and such breach, if subject to cure, continues
for a period of ten (10) business days after written notice to the Borrower from
the Holder.

4.3  Breach of Representations and Warranties. Any material representation or
warranty of the Borrower made herein, in the Subscription Agreement, Transaction
Document or in any agreement, statement or certificate given in writing pursuant
hereto or in connection herewith or therewith shall be false or misleading in
any material respect as of the date made and the Closing Date.
 
4.4  Receiver or Trustee. The Borrower or any Subsidiary of Borrower shall make
an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for them or for a substantial part of their
property or business; or such a receiver or trustee shall otherwise be
appointed.

4.5  Judgments. Any money judgment, writ or similar final process shall be
entered or filed against Borrower or any subsidiary of Borrower or any of their
property or other assets for more than $100,000, and shall remain unvacated,
unbonded or unstayed for a period of forty-five (45) calendar days.

4.6  Non-Payment. The Borrower shall have received a notice of default, which
remains uncured for a period of more than ten (10) business days, on the payment
of any one or more debts or obligations aggregating in excess of One Hundred
Thousand Dollars ($100,000.00) beyond any applicable grace period;

4.7  Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law,
or the issuance of any notice in relation to such event, for the relief of
debtors shall be instituted by or against the Borrower or any Subsidiary of
Borrower and if instituted against them are not dismissed within sixty (60)
calendar days of initiation.

4.8  Series A Default. The determination that the Borrower is in material
default of any obligation of the Borrower to the holders of any of the
Borrower’s Preferred Stock.

4.9  Delisting. Failure of the Common Stock to be quoted or listed on a
Principal Market or failure to comply with the requirements for continued
listing on a Principal Market for a period of seven consecutive trading days.

4.10   Stop Trade. An SEC or judicial stop trade order or Principal Market
trading suspension with respect to Borrower’s Common Stock that lasts for five
or more consecutive trading days.

4.11   Cross Default. A default by the Borrower of a material term, covenant,
warranty or undertaking of any Transaction Document or other agreement to which
the Borrower and Holder are parties, or the occurrence of a material event of
default under any such other agreement which is not cured after any required
notice and/or cure period.

 

 
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ARTICLE V

MISCELLANEOUS

5.1  Failure or Indulgence Not Waiver. No failure or delay on the part of Holder
hereof in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing hereunder are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

5.2  Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Borrower to: Oxford Media, Inc., One
Technology Drive, Building H, Irvine, CA 92618, Attn: Lewis Jaffe, President and
CEO, telecopier: (949) 341-0060, with a copy by telecopier only to: Keith A.
Rosenbaum, Esq., Spectrum Law Group, LLP, 1900 Main Street, Suite 125, Irvine,
CA 92614, telecopier: (949) 851-5940, and (ii) if to the Holder, to the name,
address and telecopy number set forth on the front page of this Note, with a
copy by telecopier only to its legal counsel as noted in the Subscription
Agreement.

5.3  Amendment Provision. The term “Note” and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or supplemented.

5.4  Assignability. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns.

5.5   Cost of Collection. If default is made in the payment of this Note,
Borrower shall pay the Holder hereof reasonable costs of collection, including
reasonable attorneys’ fees.

5.6  Governing Law. This Note shall be governed by and construed in accordance
with the laws of the State of New York, without regard to conflicts of laws
principles that would result in the application of the substantive laws of
another jurisdiction. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York. Both parties and the individual signing this Note on behalf of the
Borrower agree to submit to the jurisdiction of such courts. The prevailing
party shall be entitled to recover from the other party its reasonable
attorney’s fees and costs. In the event that any provision of this Note is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or unenforceability of any other provision of this
Note. Nothing contained herein shall be deemed or operate to preclude the Holder
from bringing suit or taking other legal action against the Borrower in any
other jurisdiction to collect on the Borrower’s obligations to Holder, to
realize on any collateral or any other security for such obligations, or to
enforce a judgment or other court in favor of the Holder.

 
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5.7  Maximum Payments. Nothing contained herein shall be deemed to establish or
require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest
required to be paid or other charges hereunder exceed the maximum permitted by
such law, any payments in excess of such maximum shall be credited against
amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

5.8  Construction. Each party acknowledges that its legal counsel participated
in the preparation of this Note and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting party
shall not be applied in the interpretation of this Note to favor any party
against the other.

5.9  Redemption. This Note may not be redeemed or called without the consent of
the Holder except as described in this Note.

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IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an
authorized officer as of the 4th day of August, 2006.

 
OXFORD MEDIA, INC.
     
By:________________________________
 
Name
 
Title

 
WITNESS:

______________________________________
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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