SECURED PROMISSORY NOTE

FOR VALUE RECEIVED, the undersigned, 301 PRODUCTIONS, INC., a California corporation ("Borrower"), promises to pay to the order of the ALFRED J. FERRO TRUST ("Lender"), the principal sum of ONE HUNDRED TWENTY FIVE THOUSAND AND 00/100 Dollars ($125,000.00). Such total principal sum hereunder shall be due and payable in full, together with all accrued interest thereon, on June 30, 2010. Borrower's obligations and liabilities to Lender under this Note shall be defined and referred to herein as "Borrower's Liabilities."

The unpaid principal balance of Borrower's Liabilities hereunder shall bear interest from the date of disbursement until June 30, 2010 at the rate of ten percent (10%) per annum (computed on the basis of a 360 day year and actual days elapsed). The unpaid principal balance of Borrower's Liabilities due hereunder shall bear interest from June 30, 2010 until paid at the rate of eighteen percent (18%) per annum (computed on the basis of a 360 day year and actual days elapsed).

Any deposits or other sums at any time credited by or payable or due from Lender to Borrower, or any monies, cash, cash equivalents, securities, instruments, documents or other assets of Borrower in the possession or control of Lender or its bailee for any purpose, may be reduced to cash and applied by Lender to or setoff by Lender against Borrower's Liabilities.

The debt evidenced by this Note is secured by a lien on the Collateral granted to Lender pursuant to a Security Agreement of even date herewith by and among Borrower, National Lampoon, Inc. ("NL") and Lender (the "Security Agreement"), and pursuant to any other agreement, document or instrument delivered to Lender by or on behalf of Borrower.

Borrower warrants and represents to Lender that Borrower shall use the proceeds represented by this Note solely for proper business purposes in accordance with the Security Agreement and consistently with all applicable laws and statutes.

Borrower may prepay all or any portion of Borrower's Liabilities hereunder without prepayment penalty.

The occurrence of any one of the following events shall constitute a default by the Borrower ("Event of Default") under this Note: (a) if Borrower fails to pay any scheduled principal or interest payment or fails to pay any other of Borrower's Liabilities when due and payable or declared due and payable (whether by scheduled maturity, required payment, acceleration, demand or otherwise); (b) if Borrower fails or neglects to perform, keep or observe any term, provision, condition, covenant, warranty or representation contained in this Note or the Security Agreement; (c) occurrence of a default or Event of Default under any other agreement heretofore, now or at any time hereafter delivered by or on behalf of Borrower to Lender; (d) if the Collateral or any other of Borrower's assets are attached, seized, subjected to a writ, or are levied upon or become subject to any lien or come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors; (e) if a notice of lien, levy or assessment is filed of record or given to Borrower with respect to all or any of Borrower's assets by any federal, state, or local department or agency; (f) if a petition under Title 11 of the United States Code or any similar law or regulation is filed by or against Borrower or NL, if Borrower or NL shall make an assignment for the benefit of creditors, if any case or proceeding is filed by or against Borrower or NL for its dissolution or liquidation,

or if Borrower or NL is enjoined, restrained or in any way prevented by court order from conducting all or any material part of its business affairs; (g) the dissolution of Borrower or NL, or the appointment of a conservator for all or any portion of Borrower's assets or the Collateral; (h) if a contribution failure occurs with respect to any pension plan maintained by Borrower