ex10_11.htm


    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR (B)
AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.  ANY
TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS
NOTE.  THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE MAY BE LESS THAN
THE AMOUNTS SET FORTH ON THE FACE HEREOF.

     

    OPTIONS
MEDIA GROUP HOLDINGS, INC.

     

    10%
SENIOR SECURED  PROMISSORY NOTE

     

    (non-negotiable)

     

    $1,000,000.00 June
23, 2008

     

    FOR VALUE
RECEIVED Options Media Group Holdings, Inc., a Delaware corporation (the “Company”), promises
to pay to Customer Acquisition Network Holdings, Inc. (the “Holder”), the
principal amount of One Million Dollars ($1,000,000.00), or such lesser amount
as shall equal the outstanding principal amount hereof, together with simple
interest from the date of this Note on the unpaid principal balance at a rate
equal to ten percent (10%) per annum, computed on the basis of the actual number
of days elapsed and a year of 365 days. All unpaid principal, together with any
then accrued but unpaid interest and any other amounts payable hereunder, shall
be due and payable on December 23, 2008 (the “Maturity
Date”).

     

    The
following is a statement of the rights of the Holder of this Note and the
conditions to which this Note is subject, and to which the Holder, by the
acceptance of this Note, agrees:

     

    1. Event of
Default.

     

    (a) For
purposes of this Note, an “Event of Default”
means:

     

    (i) the
Company shall default in the payment of interest and/or principal on this Note;
or

     

    (ii) the
Company shall fail to materially perform any covenant, term, provision,
condition, agreement or obligation of the Company under this Note 

     

    
      
        
        

      

      
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                    (other
than for non-payment) and such failure shall continue uncured for a period of
ten (10) business days after notice from the Holder of such failure;
or

     

    (iii) the
Company shall (1) become insolvent; (2) admit in writing its inability to pay
its debts generally as they mature; (3) make an assignment for the benefit of
creditors or commence proceedings for its dissolution; or (4) apply for or
consent to the appointment of a trustee, liquidator or receiver for it or for a
substantial part of its property or business; or

     

    (iv) a
trustee, liquidator or receiver shall be appointed for the Company or for a
substantial part of its property or business without its consent and shall not
be discharged within thirty (30) days after such appointment; or

     

    (v) any
governmental agency or any court of competent jurisdiction at the insistence of
any governmental agency shall assume custody or control of the whole or any
substantial portion of the properties or assets of the Company and shall not be
dismissed within thirty (30) days thereafter; or

     

    (vi) the
Company shall sell or otherwise transfer all or substantially all of its assets;
or

     

    (vii) bankruptcy,
reorganization, insolvency or liquidation proceedings or other proceedings, or
relief under any bankruptcy law or any law for the relief of debt shall be
instituted by or against the Company and, if instituted against the Company
shall not be dismissed within thirty (30) days after such institution, or the
Company shall by any action or answer approve of, consent to, or acquiesce in
any such proceedings or admit to any material allegations of, or default in
answering a petition filed in any such proceeding; or

     

    (viii) the
Company or any of its subsidiaries that are a party thereto breaches any
covenant or other term or condition of the Security Agreement (as defined below)
(after giving effect to any grace period set forth in such Security Agreement
relating to any such breach); or

     

    (ix) any lien
created by the Security Agreement shall at any time fail to constitute a valid
first priority perfected lien on all of the collateral purported to be secured
thereby; or

     

    (x) the
Company shall be in material default of any of its indebtedness that gives the
holder thereof the right to accelerate such indebtedness; or

     

                   
(xi) any default by the Company or any subsidiary thereof of its
obligations pursuant to that certain Agreement and Plan of Merger by and among
Options Media Group Holdings, Inc., Options Acquisition Corp., Options
Acquisition Sub, Inc. and the Holder (the “Merger Agreement”)
which remains uncured in accordance with the terms of the Merger
Agreement.

     

    
      
        
        

      

      
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    (b) Upon the
occurrence of an Event of Default, the entire indebtedness with accrued interest
thereon due under this Note shall, at the option of the Holder, be immediately
due and payable without notice.  Failure to exercise such option shall
not constitute a waiver of the right to exercise the same in the event of any
subsequent Event of Default.

     

    2. Seniority.  The
indebtedness evidenced by this Note is hereby expressly senior, in right of
payment to the prior payment in full of all of the Company’s existing and future
Subordinated Indebtedness.  As used in this Note, the term
“Subordinated Indebtedness” shall mean the principal of and unpaid accrued
interest on (i) indebtedness of the Company and (ii) any such indebtedness or
any debentures, notes or other evidence of indebtedness issued in exchange for
such Subordinated Indebtedness, or any indebtedness arising from the
satisfaction of such Subordinated Indebtedness by a guarantor.  Holder
shall execute any intercreditor agreement requested by the Company to give
effect to the foregoing seniority.

     

    3. Security
Interest.  This Note is secured by a security interest granted
to the Holder pursuant to a Security Agreement dated the date hereof (the
“Security Agreement”), as delivered by the Company to Holder.  The
Company acknowledges and agrees that should a proceeding under any bankruptcy or
insolvency law be commenced by or against the Company, 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 this Note and any
other agreement to which the Company and Holder are parties (collectively, "Loan
Documents").

     

    4. Future
Indebtedness.  The Company agrees that from the date hereof
until the earlier of August 30, 2008 and the first date on which all principal
and accrued interest on the Note are paid in full, the Company shall not incur,
or suffer to exist and Indebtedness or Liens other than Permitted Indebtedness
and Permitted Liens.  Terms not described in this paragraph 4 are
defined on Schedule A.

     

    5. Prepayment.  The
Company may prepay this Note at any time, in whole or in part, provided any such
prepayment will be applied first to the payment of expenses due under this Note,
second to interest accrued on this Note and third, if the amount of prepayment
exceeds the amount of all such expenses and accrued interest, to the payment of
principal of this Note.

     

    6. Negative
Pledge.  Without the approval of Holder, the
Company will not, and will not permit Options Acquisitions Sub, Inc. to
create or suffer to exist any Lien upon the Collateral (as defined in the
Security Agreement) other than a first priority security interest in and
upon the collateral to Lenders.

     

    7. Miscellaneous.

     

    (a) Loss, Theft, Destruction or
Mutilation of Note.  Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Note and, in the case of loss, theft or destruction, delivery of an
indemnity agreement reasonably satisfactory in form and substance to the Company
or, in the case of mutilation, on surrender and cancellation of this Note, the
Company shall execute and deliver, in lieu of this Note, a new note executed in
the same manner as this Note, in the same principal amount as the 

     

    
      
        
        

      

      
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    unpaid
principal amount of this Note and dated the date to which interest shall have
been paid on this Note or, if no interest shall have yet been so paid, dated the
date of this Note.

     

    (b) Payment.  All
payments under this Note shall be made in lawful tender of the United
States.

     

    (c) Waivers.  The
Company hereby waives notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor and all other notices or demands
relative to this instrument.

     

    (d) Usury.  In
the event that any interest paid on this Note is deemed to be in excess of the
then legal maximum rate, then that portion of the interest payment representing
an amount in excess of the then legal maximum rate shall be deemed a payment of
principal and applied against the principal of this Note.

     

    (e) Waiver and
Amendment.  Any provision of this Note may be amended, waived
or modified only by an instrument in writing signed by the party against which
enforcement of the same is sought

     

    (f) Notices.  Any
notice or other communication required or permitted to be given hereunder shall
be in writing sent by mail, facsimile with printed confirmation, nationally
recognized overnight carrier or personal delivery and shall be effective upon
actual receipt of such notice, to the following addresses until notice is
received that any such address or contact information has been
changed:

     

    To the
Company:

     

    Options
Media Group Holdings, Inc.

    240 Old
Federal Highway

    Suite
100

    Hallandale,
FL 33009

    Attn:
Chief Executive Officer

     

    To
Holder:

     

    Customer
Acquisition Network Holdings, Inc.

    200 Park
Avenue South

    Suite
908-909

    New York,
NY 10003

    Attn:
Chief Executive Officer

     

    (g) Expenses; Attorneys’
Fees.  If action is instituted to enforce or collect this Note,
the Company promises to pay all reasonable costs and expenses, including,
without limitation, reasonable attorneys’ fees and costs, incurred by the Holder
in connection with such action.

     

    (h) Successors and
Assigns.  This Note may not be assigned or transferred by the
Holder without the prior written consent of the Company.  Subject to
the 

     

    
      
        
        

      

      
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    preceding
sentence, the rights and obligations of the Company and the Holder of this Note
shall be binding upon and benefit the successors, permitted assigns, heirs,
administrators and permitted transferees of the parties.

     

    (i) Governing Law;
Jurisdiction.  THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICTS OF LAWS. EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO
THE EXCLUSIVE PERSONAL AND SUBJECT MATTER JURISDICTION OF THE SUPREME COURT OF
THE STATE OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN OVER ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.  EACH PARTY
HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW, (A) ANY
OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT; AND (B) ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. FINAL
JUDGMENT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT SHALL BE
CONCLUSIVE AND BINDING UPON EACH PARTY DULY SERVED WITH PROCESS THEREIN AND MAY
BE ENFORCED IN THE COURTS OF THE JURISDICTION OF WHICH EITHER PARTY OR ANY OF
THEIR PROPERTY IS SUBJECT, BY A SUIT UPON SUCH JUDGMENT.


     

    [SIGNATURE
PAGE FOLLOWS]

     

    
      
        
        

      

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

    
    

     

    
      	 	

              OPTIONS
      MEDIA GROUP HOLDINGS, INC.

            
	 	 
	 	By:/s/ Scott
      Frohman
	 	

              Name:
      Scott Frohman

            
	 	Title: Chief
      Executive Officer


    

     

    
      
        
        

      

      
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      Schedule
A

    

    
    

     

    “Capital Lease Obligation”
means, as to any Person, any obligation that is required to be classified and
accounted for as a capital lease on a balance sheet of such Person prepared in
accordance with GAAP, and the amount of such obligation shall be the capitalized
amount thereof, determined in accordance with GAAP.

     

    “Contingent Obligation” means,
as to any Person, any direct or indirect liability, contingent or otherwise, of
such Person with respect to any indebtedness, lease, dividend or other
obligation of another Person if a primary purpose or intent of the Person
incurring such liability, or a primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss
with respect thereto.

     

    “GAAP” means U.S. generally
accepted accounting principles.

     

    “Governmental Entity” means the
government of the United States or any other nation, or any political
subdivision thereof, whether state, provincial or local, or any agency
(including any self-regulatory agency or organization), authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administration powers or
functions of or pertaining to government.

     

    “Indebtedness” of any Person
means, without duplication:

     

    (i) All
indebtedness for borrowed money;

     

    (ii) All obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than
unsecured account trade payables that are (A) entered into or incurred in the
ordinary course of the Company’s and its Subsidiaries’ business, (B) on terms
that require full payment within 90 days from the date entered into or incurred
and (C) not unpaid in excess of 90 days from the date entered
into or incurred, or are being contested in good faith and as to which such
reserve as is required by GAAP has been made;

     

    (iii) All
reimbursement or payment obligations with respect to letters of credit, surety
bonds and other similar instruments;

     

    (iv) All
obligations evidenced by notes, bonds, debentures, redeemable capital stock or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses;

     

    (v) All
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller, bank or other financing source
under such agreement in the event of default are limited to repossession or sale
of such property);

     

    
      
        
        

      

      
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    (vi) All
Capital Lease Obligations;

     

    (vii) All
indebtedness referred to in clauses (i) through (vi) above secured by (or for
which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person that
owns such assets or property has not assumed or become liable for the payment of
such indebtedness; and

     

    (viii) All
Contingent Obligations in respect of indebtedness or obligations of others of
the kinds referred to in clauses (i) through (vii) above.

     

    “Lien” means with respect to
any asset or property, any mortgage, lien, pledge, hypothecation, charge,
security interest, encumbrance or adverse claim of any kind and any restrictive
covenant, condition, restriction or exception of any kind that has the practical
effect of creating a mortgage, lien, pledge, hypothecation, charge, security
interest, encumbrance or adverse claim of any kind (including any of the
foregoing created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor with respect to a
Capital Lease Obligation, or any financing lease having substantially the same
economic effect as any of the foregoing).

     

    “Permitted Lien”
means:

     

    (i) Liens
created by the Security Documents;

     

    (ii) Liens for
taxes or other governmental charges not at the time due and payable, or which
are being contested in good faith by appropriate proceedings diligently
prosecuted, so long as foreclosure, distraint, sale or other similar proceedings
have not been initiated, and in each case for which the Company and its
Subsidiaries maintain adequate reserves in accordance with GAAP in respect of
such taxes and charges;

     

    (iii) Liens
arising in the ordinary course of business in favor of carriers, warehousemen,
mechanics and materialmen, or other similar Liens imposed by law, which remain
payable without penalty or which are being contested in good faith by
appropriate proceedings diligently prosecuted, which proceedings have the effect
of preventing the forfeiture or sale of the property subject thereto, and in
each case for which adequate reserves in accordance with GAAP are being
maintained;

     

    (iv) Liens
arising in the ordinary course of business in connection with worker’s
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA);

     

    (v) Attachments,
appeal bonds (and cash collateral securing such bonds), judgments and other
similar Liens, for sums not exceeding $250,000 in the aggregate for the Company
and its Subsidiaries, arising in connection with court proceedings, provided that the
execution or other enforcement of such Liens is effectively stayed;

     

    (vi) Easements,
rights of way, restrictions, minor defects or irregularities in title and other
similar Liens arising in the ordinary course of business and not materially


     

    
      
        
        

      

      
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                      detracting
from the value of the property subject thereto and not interfering in any
material respect with the ordinary conduct of the business of the Company or any
of its Subsidiaries;

    

     

    (vii) Liens
arising solely by virtue of any statutory or common law provision relating to
banker’s liens, rights of set-off or similar rights and remedies and burdening
only deposit accounts or other funds maintained with a creditor depository
institution, provided that no such
deposit account is a dedicated cash collateral account or is subject to
restrictions against access by the depositor in excess of those set forth by
regulations promulgated by the Board of Governors of the U.S. Federal Reserve
System and that no such deposit account is intended by the Company or any of its
Subsidiaries to provide collateral to the depository institution;

     

    (viii) Liens
securing Capital Lease Obligations permitted under Section 5(g)(iv),
provided that such Liens attach only to the fixed assets financed by such
Capital Lease Obligations and such Liens attach concurrently with, or within
ninety (90) days, after the acquisition thereof.

     

    “Person” means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, a Governmental Entity or any other legal
entity.

     

    “Security Documents” means the
Security Agreement and any other agreements, documents and instruments executed
concurrently herewith or at any time hereafter pursuant to which the Company,
its Subsidiaries, or any other Person either (i) guarantees payment or
performance of all or any portion of the obligations hereunder or under any
other instruments delivered in connection with the transactions contemplated
hereby and by the other transaction documents, and/or (ii) provides, as security
for all or any portion of such obligations, a Lien on any of its assets in favor
of a Buyer, as any or all of the same may be amended, supplemented, restated or
otherwise modified from time to time.