Exhibit 4.1       Convertible Note Purchase Agreement

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                       CONVERTIBLE NOTE PURCHASE AGREEMENT

                                      Among

                          STOCKGROUP.COM HOLDINGS, INC.

                                       and

                         THE INVESTORS SIGNATORY HERETO




                           Dated as of March 31, 2000




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     CONVERTIBLE NOTE PURCHASE AGREEMENT (this  "Agreement"),  dated as of March
31, 2000,  among  Stockgroup.com  Holdings,  Inc., a Colorado  corporation  (the
"Company"),  and  the  investors  signatory  hereto  (each  such  investor  is a
"Purchaser" and all such investors are, collectively, the "Purchasers").

     WHEREAS,  subject to the terms and conditions set forth in this  Agreement,
the  Company  desires to issue and sell to the  Purchasers  and the  Purchasers,
severally  and not  jointly,  desire to purchase  from the Company an  aggregate
principal  amount of $3,000,000 of the Company's 8% Convertible  Notes due March
31, 2002,  which shall be in the form of Exhibit A (the "Notes"),  and which are
convertible into shares of the Company's common stock, no par value (the "Common
Stock"). All references to $ (dollars) shall be to US$ (United States Dollars).

     NOW, THEREFORE,  IN CONSIDERATION of the mutual covenants contained in this
Agreement,  and for  other  good and  valuable  consideration  the  receipt  and
adequacy  are hereby  acknowledged,  the  Company  and the  Purchasers  agree as
follows:


                                    ARTICLE I
                                PURCHASE AND SALE

     1.1 The Closing.

          (a) The Closing.  (i) Subject to the terms and conditions set forth in
     this Agreement,  the Company shall issue and sell to the Purchasers and the
     Purchasers shall, severally and not jointly,  purchase from the Company the
     Notes for an aggregate  purchase  price of  $3,000,000.  The closing of the
     purchase  and sale of the Notes  (the  "Closing")  shall  take place at the
     offices of  Robinson  Silverman  Pearce  Aronsohn  & Berman LLP  ("Robinson
     Silverman"),  1290  Avenue  of the  Americas,  New  York,  New York  10104,
     immediately  following  the  execution  hereof  or such  later  date as the
     parties shall agree. The date of the Closing is hereinafter  referred to as
     the "Closing Date."

               (ii) On the  Closing  Date,  the parties  shall  deliver or shall
          cause to be delivered the following:  (A) the Company shall deliver to
          each  Purchaser  (1)  the  Notes  in the  aggregate  principal  amount
          indicated  below such  Purchaser's  name on the signature page to this
          Agreement,  registered  in the  name of such  Purchaser,  (2) a Common
          Stock purchase  warrant,  in the form of Exhibit D,  registered in the
          name of such  Purchaser,  pursuant to which such Purchaser  shall have
          the right to acquire  the number of shares of Common  Stock  indicated
          below such  Purchaser's  name on the signature  page to this Agreement
          (collectively,  the  "Warrants"),  (3) the legal opinion of Sierchio &
          Albert,  P.C., outside counsel to the Company,  in the form of Exhibit
          C, and (4) an executed  Registration Rights Agreement,  dated the date
          hereof, among the Company and the Purchasers, in the form of Exhibit B
          (the  "Registration   Rights  Agreement"),   and  the  Transfer  Agent
          Instructions,  in the form of Exhibit E, delivered to and acknowledged
          by the Company's  transfer agent (the "Transfer Agent  Instructions");
          and (B) each Purchaser  shall deliver (1) the purchase price indicated
          below such Purchaser's name on the signature page to this Agreement in
          United States dollars in immediately  available funds by wire transfer
          to an account  designated  in writing by the Company for such purpose,
          and (2) an executed Registration Rights Agreement.

     1.2 Certain  Defined  Terms.  For purposes of this  Agreement,  "Conversion
Price,"  "Original  Issue Date" and  "Trading  Day" shall have the  meanings set
forth in the Notes;  "Business Day" shall mean any day except  Saturday,  Sunday
and any day which  shall be a federal  legal  holiday  in the  United  States or
Canada or a day on which  banking  institutions  in the State of New York or the
Province of British Columbia,  Canada are authorized or required by law or other
governmental  action to close;  "Person"  means an  individual  or  corporation,
partnership,  trust, incorporated or unincorporated association,  joint venture,
limited  liability  company,  joint stock  company,  government (or an agency or
subdivision thereof) or other entity of any kind.


                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES

     2.1 Representations,  Warranties and Agreements of the Company. The Company
hereby makes the following representations and warranties to the Purchasers:

          (a) Organization and Qualification.  The Company is a corporation duly
     incorporated,  validly  existing and in good standing under the laws of the
     State of Colorado with the requisite  corporate  power and authority to own
     and use its properties and assets and to carry on its business as currently
     conducted.  The  Company  has no  subsidiaries  other  than as set forth in
     Schedule 2.1(a) (collectively the "Subsidiaries"). Each of the Subsidiaries
     is an entity,  duly incorporated or otherwise  organized,  validly existing
     and  in  good  standing  under  the  laws  of  the   jurisdiction   of  its
     incorporation or organization (as applicable), with the requisite power and
     authority  to own and use its  properties  and  assets  and to carry on its
     business as currently  conducted.  Each of the Company and the Subsidiaries
     is duly  qualified  to do  business  and is in good  standing  as a foreign
     corporation  in each  jurisdiction


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     in which the nature of the business conducted or property owned by it makes
     such qualification  necessary,  except where the failure to be so qualified
     or in good standing,  as the case may be, could not, individually or in the
     aggregate, (x) adversely affect the legality, validity or enforceability of
     the  Securities  (as  defined  below)  or  any  of  this   Agreement,   the
     Registration Rights Agreement, the Notes or the Warrants (collectively, the
     "Transaction  Documents"),  (y) have or result in a material adverse effect
     on the results of operations, assets, prospects, or condition (financial or
     otherwise) of the Company and the  Subsidiaries,  taken as a whole,  or (z)
     adversely  impair the Company's  ability to perform fully on a timely basis
     its obligations under any of the Transaction  Documents (any of (x), (y) or
     (z), a "Material Adverse Effect").


          (b)  Authorization;   Enforcement.   The  Company  has  the  requisite
     corporate  power  and  authority  to  enter  into  and  to  consummate  the
     transactions   contemplated  by  each  of  the  Transaction  Documents  and
     otherwise  to carry  out its  obligations  thereunder.  The  execution  and
     delivery  of each  of the  Transaction  Documents  by the  Company  and the
     consummation by it of the transactions  contemplated thereby have been duly
     authorized  by all  necessary  action  on the  part of the  Company  and no
     further  action is  required by the Company to  authorize  the  Transaction
     Documents.  Each of the Transaction Documents has been duly executed by the
     Company and, when  delivered  (or filed,  as the case may be) in accordance
     with the terms hereof,  will constitute the valid and binding obligation of
     the Company  enforceable  against the Company in accordance with its terms.
     Neither  the  Company  nor any  Subsidiary  is in  violation  of any of the
     provisions  of its  respective  certificate  or articles of  incorporation,
     by-laws or other organizational or charter documents.

          (c) Capitalization.  The number of authorized,  issued and outstanding
     capital stock of the Company is set forth in Schedule  2.1(c).  The Company
     owns all of the capital stock of each subsidiary. No shares of Common Stock
     are  entitled to  preemptive  or similar  rights,  nor is any holder of the
     Common Stock  entitled to preemptive or similar  rights  arising out of any
     agreement  or  understanding  with  the  Company  by  virtue  of any of the
     Transaction  Documents.  Except as a result of the purchase and sale of the
     Notes and the Warrants and except as  disclosed in Schedule  2.1(c),  there
     are no outstanding options,  warrants, script rights to subscribe to, calls
     or  commitments  of any character  whatsoever  relating to, or  securities,
     rights or obligations  convertible into or exchangeable  for, or giving any
     Person (as defined below) any right to subscribe for or acquire, any shares
     of Common Stock, or contracts, commitments, understandings, or arrangements
     by which the  Company or any  Subsidiary  is or may  become  bound to issue
     additional  shares of Common Stock, or securities or rights  convertible or
     exchangeable into shares of Common Stock.

          (d) Issuance of the Notes and the Warrants. The Notes and the Warrants
     are duly  authorized  and, when issued and paid for in accordance  with the
     terms   hereof,   will  be  duly  and  validly   issued,   fully  paid  and
     nonassessable,  free and clear of all  liens,  encumbrances  and  rights of
     first refusal of any kind (collectively, "Liens"), other than those created
     by the Purchasers  with third  parties.  The Company has on the date hereof
     and will,  at all times while the Notes and the Warrants  are  outstanding,
     maintain an adequate  reserve of duly  authorized  shares of Common  Stock,
     reserved  for  issuance  to the holders of the Notes and the  Warrants,  to
     enable it to perform its conversion,  exercise and other  obligations under
     this  Agreement,  the Notes and the  Warrants.  Such number of reserved and
     available  shares of  Common  Stock is not less than the sum of (i) 200% of
     the  number  of  shares  of  Common  Stock  which  would be  issuable  upon
     conversion in full of the Notes,  assuming such conversion  occurred on the
     Original  Issue Date,  the Notes remain  outstanding  for two years and all
     interest is paid in shares of Common Stock and (ii) the number of shares of
     Common Stock  issuable upon exercise of the Warrants (such number of shares
     of  Common  Stock  as  contemplated  in  clauses  (i)-(ii),   the  "Initial
     Minimum").  All  such  authorized  shares  of  Common  Stock  shall be duly
     reserved  for  issuance to the holders of the Notes and the  Warrants.  The
     shares of  Common  Stock  issuable  upon  conversion  of the Notes and upon
     exercise  of the  Warrants  are  collectively  referred  to  herein  as the
     "Underlying  Shares." The Notes, the Warrants and the Underlying Shares are
     collectively  referred  to herein  as,  the  "Securities."  When  issued in
     accordance with the Notes and the Warrants,  the Underlying  Shares will be
     duly authorized,  validly issued,  fully paid and  nonassessable,  free and
     clear of all Liens other than those  created by the  Purchasers  with third
     parties.

          (e) No  Conflicts.  The  execution,  delivery and  performance  of the
     Transaction Documents by the Company and the consummation by the Company of
     the transactions contemplated thereby do not and will not (i) conflict with
     or violate any provision of the Company's or any  Subsidiary's  certificate
     or articles of  incorporation,  bylaws or other charter  documents (each as
     amended through the date hereof), or (ii) subject to obtaining the Required
     Approvals (as defined below), conflict with, or constitute a default (or an
     event which with


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     notice or lapse of time or both would become a default)  under,  or give to
     others any rights of termination,  amendment,  acceleration or cancellation
     (with or without notice,  lapse of time or both) of, any agreement,  credit
     facility, debt or other instrument (evidencing a Company or Subsidiary debt
     or otherwise) or other understanding to which the Company or any Subsidiary
     is a party  or by  which  any  property  or  asset  of the  Company  or any
     Subsidiary is bound or affected, or (iii) result in a violation of any law,
     rule, regulation, order, judgment,  injunction, decree or other restriction
     of any court or governmental authority to which the Company or a Subsidiary
     is subject  (including  federal and state securities laws and regulations),
     or by which any  property  or asset of the  Company  is bound or  affected;
     except  in the case of each of  clauses  (ii)  and  (iii),  as  could  not,
     individually  or in the  aggregate,  have or result in a  Material  Adverse
     Effect.  The business of the Company is not being conducted in violation of
     any law, ordinance or regulation of any governmental authority,  except for
     violations  which,  individually  or in the  aggregate,  could  not have or
     result in a Material Adverse Effect.

          (f)  Filings,  Consents  and  Approvals.  Neither  the Company nor any
     Subsidiary  is required to obtain any  consent,  waiver,  authorization  or
     order of, give any notice to, or make any filing or registration  with, any
     court or other federal,  state,  local or other  governmental  authority or
     other Person in connection with the execution,  delivery and performance by
     the  Company  of the  Transaction  Documents,  other  than (i) the  filings
     required  pursuant to Section 3.10, (ii) the filing with the Securities and
     Exchange Commission (the "Commission") of a registration  statement meeting
     the  requirements  set  forth  in the  Registration  Rights  Agreement  and
     covering  the  resale  of the  Underlying  Shares  by the  Purchasers  (the
     "Underlying  Shares  Registration  Statement"),  (iii)  applicable Blue Sky
     filings  and (iv) in all other  cases  where  the  failure  to obtain  such
     consent,  waiver,  authorization  or order,  or to give such notice or make
     such filing or registration could not have or result in, individually or in
     the  aggregate,  a Material  Adverse  Effect  (collectively,  the "Required
     Approvals").

          (g) Litigation; Proceedings. There is no action, suit, inquiry, notice
     of violation,  proceeding or investigation  pending or, to the knowledge of
     the  Company,  threatened  against or  affecting  the Company or any of its
     Subsidiaries or any of their respective  properties before or by any court,
     arbitrator,  governmental or administrative  agency or regulatory authority
     (federal,  state,  county,  local or foreign)  (collectively,  an "Action")
     which (i)  adversely  affects  or  challenges  the  legality,  validity  or
     enforceability  of any of the  Transaction  Documents or the  Securities or
     (ii) could,  individually or in the aggregate, have or result in a Material
     Adverse Effect.

          (h) No Default or  Violation.  Neither the Company nor any  Subsidiary
     (i) is in default under or in violation of (and no event has occurred which
     has not been  waived  which,  with  notice or lapse of time or both,  would
     result in a default by the Company or any  Subsidiary  under),  nor has the
     Company or any Subsidiary  received notice of a claim that it is in default
     under  or  that it is in  violation  of,  any  indenture,  loan  or  credit
     agreement or any other agreement or instrument to which it is a party or by
     which it or any of its  properties  is bound,  (ii) is in  violation of any
     order  of any  court,  arbitrator  or  governmental  body,  or  (iii) is in
     violation of any statute, rule or regulation of any governmental authority,
     in each  case of  clause  (i),  (ii) or (iii)  above,  except  as could not
     individually  or in the  aggregate,  have or result in a  Material  Adverse
     Effect.

          (i) Private Offering. Assuming the accuracy of the representations and
     warranties of the Purchasers set forth in Sections  2.2(b)-(g),  the offer,
     issuance  and sale of the  Securities  to the  Purchasers  as  contemplated
     hereby are exempt from the registration  requirements of the Securities Act
     of 1933,  as amended (the  "Securities  Act").  Neither the Company nor any
     Person  acting  on its  behalf  has taken or is,  to the  knowledge  of the
     Company,  contemplating taking any action which could subject the offering,
     issuance or sale of the Securities to the Purchasers,  to the  registration
     requirements of the Securities Act including soliciting any offer to buy or
     sell  the  Securities  by  means of any  form of  general  solicitation  or
     advertising.

          (j) SEC  Documents;  Financial  Statements.  The Company has filed all
     reports  required to be filed by it under the  Securities  Exchange  Act of
     1934, as amended (the "Exchange Act"),  including pursuant to Section 13(a)
     or 15(d) thereof,  for the twelve months preceding the date hereof (or such
     shorter  period as the Company was  required by law to file such  material)
     (the foregoing materials being collectively  referred to herein as the "SEC
     Documents" and,  together with the Transaction  Documents and the Schedules
     to this  Agreement,  the  "Disclosure  Materials") on a timely basis or has
     received  a valid  extension  of such time of filing and has filed any such
     SEC Documents  prior to the expiration of any such  extension.  As of their
     respective dates, the SEC Documents  complied in all material respects with
     the  requirements  of the Securities Act and the Exchange Act and the rules
     and regulations of the Commission promulgated  thereunder,  and none of the
     SEC  Documents,  when filed,


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     contained  any untrue  statement  of a material  fact or omitted to state a
     material fact  required to be stated  therein or necessary in order to make
     the statements therein, in light of the circumstances under which they were
     made,  not  misleading.  All material  agreements to which the Company is a
     party or to which the  property or assets of the  Company are subject  have
     been filed as exhibits to the SEC  Documents  as  required.  The  financial
     statements  of the  Company  included  in the SEC  Documents  comply in all
     material respects with applicable accounting requirements and the rules and
     regulations of the Commission with respect thereto as in effect at the time
     of filing. Such financial  statements have been prepared in accordance with
     generally  accepted  accounting  principles  applied on a consistent  basis
     during the periods involved ("GAAP"),  except as may be otherwise specified
     in such financial  statements or the notes  thereto,  and fairly present in
     all  material  respects  the  financial  position  of the  Company  and its
     consolidated  subsidiaries  as of and for the dates thereof and the results
     of operations  and cash flows for the periods then ended,  subject,  in the
     case  of  unaudited  statements,  to  normal,  immaterial,  year-end  audit
     adjustments or other  adjustments  required to reconcile GAAP and generally
     accepted accounting principles under Canadian practice.  Since December 31,
     1999,  except as specifically  disclosed in the Disclosure  Materials,  (a)
     there has been no event,  occurrence or development  that has or that could
     result in a Material  Adverse Effect,  (b) the Company has not incurred any
     liabilities  (contingent or otherwise) other than (x) liabilities  incurred
     in the ordinary  course of business  consistent  with past practice and (y)
     liabilities  not  required  to be  reflected  in  the  Company's  financial
     statements  pursuant to GAAP or required to be  disclosed  in filings  made
     with  the  Commission,  (c) the  Company  has not  altered  its  method  of
     accounting  or the  identity  of its  auditors  and (d) the Company has not
     declared or made any payment or  distribution  of cash or other property to
     its  stockholders  or officers or directors  (other than in compliance with
     existing  Company stock option plans) with respect to its capital stock, or
     purchased,  redeemed  (or made any  agreements  to  purchase or redeem) any
     shares of its capital stock.

          (k)  Investment  Company.  The Company is not, and is not an Affiliate
     (as  defined  in Rule 405 under  the  Securities  Act) of,  an  "investment
     company"  within the  meaning of the  Investment  Company  Act of 1940,  as
     amended.

          (l) Certain  Fees.  Except for certain  fees payable to Jesup & Lamont
     Securities Corp. by the Company,  no fees or commissions will be payable by
     the  Company  to any  broker,  financial  advisor  or  consultant,  finder,
     placement agent,  investment  banker,  bank or other Person with respect to
     the transactions  contemplated by this Agreement. The Purchasers shall have
     no  obligation  with respect to any fees or with respect to any claims made
     by or on behalf of other  Persons for fees of a type  contemplated  in this
     Section that may be due in connection with the transactions contemplated by
     this  Agreement.   The  Company  shall  indemnify  and  hold  harmless  the
     Purchasers, their employees, officers, directors, agents, and partners, and
     their respective Affiliates,  from and against all claims, losses, damages,
     costs (including the costs of preparation and attorney's fees) and expenses
     suffered in respect of any such claimed or existing  fees, as such fees and
     expenses are incurred.

          (m) Solicitation Materials.  Neither the Company nor any Person acting
     on the  Company's  behalf  has  solicited  any  offer  to buy or  sell  the
     Securities by means of any form of general solicitation or advertising.

          (n) Exclusivity. The Company shall not issue and sell the Notes to any
     Person other than the Purchasers without the specific prior written consent
     of the Purchasers.

          (o) Listing and  Maintenance  Requirements  Compliance.  Except as set
     forth in the SEC  Documents,  the  Company  has not,  in the twelve  months
     preceding the date hereof, received notice (written or oral) from any stock
     exchange,  market or trading  facility on which the Common  Stock is or has
     been listed (or on which it has been quoted) to the effect that the Company
     is not in compliance  with the listing or maintenance  requirements of such
     exchange or market.  The  Company is, and has no reason to believe  that it
     will not in the  foreseeable  future continue to be, in compliance with all
     such listing and maintenance requirements.

          (p) Patents and Trademarks.  The Company and its Subsidiaries have, or
     have rights to use, all patents, patent applications, trademarks, trademark
     applications,  service marks, trade names, copyrights,  licenses and rights
     which are necessary or material for use in connection with their respective
     businesses,  as described in the SEC  Documents and which the failure to so
     have would have a Material Adverse Effect (collectively,  the "Intellectual
     Property  Rights").  Neither the Company nor any  Subsidiary has received a
     written notice that the Intellectual Property Rights used by the Company or
     its  Subsidiaries  violates or infringes upon the rights of any


                                      -9-
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     Person.  To the  best  knowledge  of the  Company,  all  such  Intellectual
     Property Rights are  enforceable  and there is no existing  infringement by
     another Person of any of the Intellectual Property Rights.

          (q) Registration Rights; Rights of Participation.  Except as set forth
     on Schedule 6(b) to the Registration Rights Agreement,  the Company has not
     granted or agreed to grant to any Person any rights (including "piggy-back"
     registration  rights) to have any securities of the Company registered with
     the  Commission  or any  other  governmental  authority  which has not been
     satisfied.  No Person,  has any right of first refusal,  preemptive  right,
     right  of  participation,  or  any  similar  right  to  participate  in the
     transactions contemplated by the Transaction Documents.

          (r) Regulatory Permits.  The Company and its Subsidiaries  possess all
     certificates, authorizations and permits issued by the appropriate Federal,
     state  or  foreign  regulatory   authorities  necessary  to  conduct  their
     respective  businesses as described in the SEC Documents,  except where the
     failure  to  possess  such  permits  could  not,  individually  or  in  the
     aggregate,   have  or  result  in  a  Material  Adverse  Effect  ("Material
     Permits"), and neither the Company nor any such Subsidiary has received any
     notice of  proceedings  relating to the revocation or  modification  of any
     Material Permit.

          (s) Title. The Company and the  Subsidiaries  have good and marketable
     title in fee simple to all real property owned by them which is material to
     the business of the Company and its  Subsidiaries  and good and  marketable
     title in all  personal  property  owned by them  which is  material  to the
     business of the Company and its  Subsidiaries,  in each case free and clear
     of all  Liens,  except for Liens as do not  materially  affect the value of
     such  property  and do not  interfere  with the use made and proposed to be
     made  of such  property  by the  Company  and its  Subsidiaries.  Any  real
     property  and   facilities   held  under  lease  by  the  Company  and  its
     Subsidiaries  are held by them  under  valid,  subsisting  and  enforceable
     leases of which the Company and its  Subsidiaries  are in compliance and do
     not  interfere  with the use made and proposed to be made of such  property
     and buildings by the Company and its Subsidiaries.

          (t) Absence of Certain  Proceedings.  Except as  described  in the SEC
     Documents,  (i) there is no Action pending or threatened in writing against
     the Company,  in any such case wherein an unfavorable  decision,  ruling or
     finding could have or result in a Material Adverse Effect; (ii) neither the
     Company nor any Subsidiary,  nor any director or officer thereof, is or has
     been the subject of any Action  involving  (A) a claim of  violation  of or
     liability  under federal or state  securities laws or (B) a claim of breach
     of  fiduciary  duty;  (iii) the Company  does not have  pending  before the
     Commission any request for  confidential  treatment of information  and the
     Company has no knowledge  of any  expected  such request that would be made
     prior to the  Effectiveness  Date (as  defined in the  Registration  Rights
     Agreement);  and (iv) there has not been,  and to the best of the Company's
     knowledge there is not pending or  contemplated,  any  investigation by the
     Commission  involving  the  Company or any  current or former  director  or
     officer of the Company.

          (u) Labor  Relations.  No  material  labor  problem  exists or, to the
     knowledge  of the  Company,  is  imminent  with  respect  to any of the key
     employees of the Company.

          (x)  Disclosure.  The Company  confirms  that neither it nor any other
     Person  acting on its  behalf has  provided  any of the  Purchasers  or its
     agents or counsel with any information that constitutes or might constitute
     material non-public information.  The Company understands and confirms that
     the  Purchasers  shall  be  relying  on the  foregoing  representations  in
     effecting  transactions  in  securities  of  the  Company.  All  disclosure
     provided to the  Purchasers  regarding  the  Company,  its business and the
     transactions   contemplated   hereby,   including  the  Schedules  to  this
     Agreement,  furnished  by or on behalf of the  Company are true and correct
     and do not contain any untrue statement of a material fact or omit to state
     any material fact necessary in order to make the  statements  made therein,
     in light of the circumstances under which they were made, not misleading.

     2.2 Representations and Warranties of the Purchasers. Each Purchaser hereby
for itself and for no other Purchaser  represents and warrants to the Company as
follows:

          (a)  Organization;   Authority.  Such  Purchaser  is  an  entity  duly
     organized,  validly  existing  and in good  standing  under the laws of the
     jurisdiction  of  its   organization   with  the  requisite   corporate  or
     partnership  power  and  authority  to  enter  into and to  consummate  the
     transactions  contemplated  by the  Transaction  Documents and otherwise to
     carry out its obligations thereunder. The purchase by such Purchaser of the
     Securities  hereunder



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<PAGE>

     has  been  duly  authorized  by all  necessary  action  on the part of such
     Purchaser. Each of this Agreement and the Registration Rights Agreement has
     been duly executed by such Purchaser,  and when delivered by such Purchaser
     in accordance with the terms hereof,  will constitute the valid and legally
     binding obligation of such Purchaser,  enforceable against it in accordance
     with its terms.

          (b) Investment  Intent.  Such Purchaser is acquiring the Securities as
     principal for its own account for  investment  purposes only and not with a
     view to or for  distributing  or  reselling  such  Securities  or any  part
     thereof, without prejudice,  however, to such Purchaser's right, subject to
     the provisions of this Agreement, the Registration Rights Agreement and the
     Warrant,  at all times to sell or  otherwise  dispose of all or any part of
     such Securities pursuant to an effective  registration  statement under the
     Securities  Act  and  in  compliance  with  applicable  federal  and  state
     securities  laws  or  under  an  exemption  from  such  registration.  Such
     Purchaser is acquiring the Securities  hereunder in the ordinary  course of
     its business.  Such Purchaser does not have any agreement or understanding,
     directly or indirectly, with any Person to distribute the Securities.

          (c) Purchaser Status. At the time such Purchaser was offered the Notes
     and its respective  Warrants,  it was, and at the date hereof it is, and at
     each  exercise  date  under  its  respective  Warrants,   it  will  be,  an
     "accredited  investor" as defined in Rule 501(a) under the Securities  Act.
     Such  Purchaser has not been formed solely for the purpose of acquiring the
     Securities.

          (d)  Experience of such  Purchaser.  Such  Purchaser,  either alone or
     together with its representatives,  has such knowledge,  sophistication and
     experience  in  business  and  financial  matters  so as to be  capable  of
     evaluating  the  merits  and  risks of the  prospective  investment  in the
     Securities, and has so evaluated the merits and risks of such investment.

          (e)  Ability  of such  Purchaser  to Bear  Risk  of  Investment.  Such
     Purchaser  is able to  bear  the  economic  risk  of an  investment  in the
     Securities  and, at the present  time, is able to afford a complete loss of
     such investment.  Such Purchaser  understands the restrictions  relevant to
     transfers of Securities as set forth in the Transaction Documents.

          (f) Access to  Information.  Such Purchaser  acknowledges  that it has
     reviewed the Disclosure Materials and has been afforded (i) the opportunity
     to ask such questions as it has deemed necessary of, and to receive answers
     from, representatives of the Company concerning the terms and conditions of
     the offering of the Securities and the merits and risks of investing in the
     Securities;  (ii) access to information about the Company and the Company's
     financial   condition,   results  of  operations,   business,   properties,
     management   and  prospects   sufficient  to  enable  it  to  evaluate  its
     investment; and (iii) the opportunity to obtain such additional information
     which the Company possesses or can acquire without  unreasonable  effort or
     expense  that is  necessary to make an informed  investment  decision  with
     respect to the  investment and to verify the accuracy and  completeness  of
     the  information  contained  in  the  Disclosure  Materials.  Neither  such
     inquiries  nor any other  investigation  conducted  by or on behalf of such
     Purchaser or its  representatives or counsel shall modify,  amend or affect
     such Purchaser's  right to rely on the truth,  accuracy and completeness of
     the Disclosure  Materials and the Company's  representations and warranties
     contained in the Transaction Documents.

          (g)  General  Solicitation.  Such  Purchaser  is  not  purchasing  the
     Securities  as a result of or  subsequent  to any  advertisement,  article,
     notice or other  communication  regarding the  Securities  published in any
     newspaper,  magazine or similar media or broadcast over television or radio
     or presented at any seminar or any other  general  solicitation  or general
     advertisement.

          (h) Reliance. Such Purchaser understands and acknowledges that (i) the
     Securities are being offered and sold to it without  registration under the
     Securities Act in a private  placement that is exempt from the registration
     provisions  of the  Securities  Act  and  (ii)  the  availability  of  such
     exemption,  depends in part on, and the Company will rely upon the accuracy
     and  truthfulness  of, the  foregoing  representations  and such  Purchaser
     hereby consents to such reliance.

     The Company acknowledges and agrees that no Purchaser makes or has made any
representations  or  warranties  with respect to the  transactions  contemplated
hereby other than those specifically set forth in this Section 2.2.


                                      -11-
<PAGE>


                                   ARTICLE III
                         OTHER AGREEMENTS OF THE PARTIES

     3.1 Transfer Restrictions.  (a) Securities may only be disposed of pursuant
to an effective  registration statement under the Securities Act, to the Company
or pursuant to an available  exemption  from or in a transaction  not subject to
the registration  requirements of the Securities Act, and in compliance with any
applicable federal and state securities laws. In connection with any transfer of
Securities other than pursuant to an effective  registration statement or to the
Company,  except as  otherwise  set forth  herein,  the  Company may require the
transferor  thereof to provide to the Company an opinion of counsel  selected by
the  transferor,  the form and  substance of which  opinion  shall be reasonably
satisfactory  to the Company,  to the effect that such transfer does not require
registration  of  such   transferred   securities   under  the  Securities  Act.
Notwithstanding the foregoing, the Company, without requiring a legal opinion as
described in the immediately  preceding sentence,  hereby consents to and agrees
to  register on the books of the  Company  and with any  transfer  agent for the
securities  of the Company any transfer of  Securities  by a Purchaser to one or
more funds or managed accounts under common management with such Purchaser,  and
any  transfer  among  any such  funds or  managed  accounts,  provided  that the
transferee  certifies  to the Company  that it is an  "accredited  investor"  as
defined in Rule 501(a) under the  Securities  Act and that it is  acquiring  the
Securities  solely  for  investment  purposes  (subject  to  the  qualifications
hereof).  Any such transferee shall agree in writing to be bound by the terms of
this Agreement and shall have the rights of a Purchaser under this Agreement and
the Registration Rights Agreement.

          (b) The Purchasers agree to the imprinting,  so long as is required by
     this Section 3.1(b), of the following legend on the Securities:

               NEITHER  THESE  SECURITIES  NOR THE  SECURITIES  INTO WHICH THESE
          SECURITIES ARE [CONVERTIBLE]  [EXERCISABLE]  HAVE BEEN REGISTERED WITH
          THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
          ANY STATE IN RELIANCE UPON AN EXEMPTION  FROM  REGISTRATION  UNDER THE
          SECURITIES  ACT OF 1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  AND,
          ACCORDINGLY,  MAY  NOT  BE  OFFERED  OR  SOLD  EXCEPT  PURSUANT  TO AN
          EFFECTIVE  REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
          TO AN AVAILABLE  EXEMPTION  FROM, OR IN A TRANSACTION  NOT SUBJECT TO,
          THE REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
          WITH APPLICABLE STATE SECURITIES LAWS.

     Underlying  Shares  shall not  contain  the legend set forth  above nor any
other  legend if the  conversion  of Notes and exercise of the Warrants or other
issuances  of  Underlying  Shares as  contemplated  hereby,  by the Notes or the
Warrants occurs at any time while an Underlying Shares Registration Statement is
effective  under the  Securities  Act or, in the event there is not an effective
Underlying  Shares  Registration  Statement,  at such  time,  in the  opinion of
counsel  to  the  Company,   such  legend  is  not  required  under   applicable
requirements  of the  Securities  Act (including  judicial  interpretations  and
pronouncements  issued by the staff of the Commission).  The Company shall cause
its  counsel  to  issue  the  legal  opinion  included  in  the  Transfer  Agent
Instructions  to the  Company's  transfer  agent on the day that the  Underlying
Shares  Registration  Statement  is declared  effective by the  Commission  (the
"Effective  Date").  The Company agrees that, in the event any Underlying Shares
are issued with a legend in accordance with this Section 3.1(b), it will, within
three Trading Days after request therefor by a Purchaser, provide such Purchaser
with a certificate or certificates  representing  such Underlying  Shares,  free
from such legend at such time as such legend would not have been required  under
this Section 3.1(b) had such issuance occurred on the date of such request.  The
Company may not make any  notation on its  records or give  instructions  to any
transfer  agent of the Company  which enlarge the  restrictions  of transfer set
forth in this Section.

     3.2 Acknowledgment of Dilution.  The Company acknowledges that the issuance
of the Underlying Shares upon (i) conversion of the Notes in accordance with the
terms of the Notes,  and (ii) exercise of the Warrants in accordance  with their
terms, will result in dilution of the outstanding  shares of Common Stock, which
dilution may be substantial under certain market conditions. The Company further
acknowledges  that its obligation to issue Underlying Shares upon (x) conversion
of the Notes in accordance with the terms of the Notes,  and (y) exercise of



                                      -12-
<PAGE>

the Warrants in  accordance  with their terms,  is  unconditional  and absolute,
subject to the  limitations  set forth  herein in the Notes or  pursuant  to the
Warrants, regardless of the effect of any such dilution.

     3.3 Furnishing of  Information.  As long as the Purchasers own  Securities,
the Company  covenants to timely file (or obtain  extensions in respect  thereof
and file within the applicable grace period) all reports required to be filed by
the  Company  after the date hereof  pursuant  to Section  13(a) or 15(d) of the
Exchange Act. As long as the  Purchasers own  Securities,  if the Company is not
required to file reports pursuant to such sections,  it will prepare and furnish
to the  Purchasers  and make publicly  available in accordance  with Rule 144(c)
promulgated  under the  Securities  Act such  information as is required for the
Purchasers  to  sell  the  Securities  under  Rule  144  promulgated  under  the
Securities  Act. The Company  further  covenants  that it will take such further
action as any holder of Securities  may  reasonably  request,  all to the extent
required  from time to time to enable  such  Person  to sell  Underlying  Shares
without  registration  under the  Securities  Act within the  limitation  of the
exemptions  provided by Rule 144 promulgated under the Securities Act, including
the legal opinion referenced above in this Section. Upon the request of any such
Person,  the Company shall deliver to such Person a written  certification  of a
duly authorized officer as to whether it has complied with such requirements.

     3.4  Integration.  The Company shall not, and shall use its best efforts to
ensure that, no Affiliate of the Company shall,  sell, offer for sale or solicit
offers to buy or  otherwise  negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the  Securities  in a manner that would  require the  registration  under the
Securities Act of the sale of the Securities to the Purchasers.

     3.5 Increase in Authorized  Shares. If on any date the Company would be, if
a notice of  conversion or exercise (as the case may be) were to be delivered on
such date,  precluded  from (a)  issuing  (a) 200% of the  number of  Underlying
Shares as would then be issuable upon a conversion in full of the Notes, and (b)
the number of Underlying  Shares  issuable upon exercise in full of the Warrants
(the "Current Required Minimum"), in either case, due to the unavailability of a
sufficient number of authorized but unissued or reserved shares of Common Stock,
then the Board of  Directors  of the Company  shall  promptly  (and in any case,
within 30 Business Days from such date) prepare and mail to the  stockholders of
the Company  proxy  materials  requesting  authorization  to amend the Company's
certificate  or articles of  incorporation  to increase  the number of shares of
Common Stock which the Company is authorized to issue to at least such number of
shares as  reasonably  requested by the  Purchasers in order to provide for such
number of authorized  and unissued  shares of Common Stock to enable the Company
to comply with its  issuance,  conversion  exercise  and  reservation  of shares
obligations as set forth in this Agreement,  the Notes and the Warrants (the sum
of (x) the number of shares of Common Stock then  outstanding plus all shares of
Common Stock  issuable upon exercise of all  outstanding  options,  warrants and
convertible  instruments,  and (y) the  Current  Required  Minimum,  shall  be a
reasonable  number). In connection  therewith,  the Board of Directors shall (a)
adopt  proper  resolutions  authorizing  such  increase,  (b)  recommend  to and
otherwise use its best efforts to promptly and duly obtain stockholder  approval
to carry out such resolutions (and hold a special meeting of the stockholders no
later  than the  earlier  to occur of the 60th day after  delivery  of the proxy
materials relating to such meeting and the 90th day after request by a holder of
Securities to issue the number of Underlying Shares in accordance with the terms
hereof)  and (c)  within  five  Business  Days  of  obtaining  such  stockholder
authorization,  file an  appropriate  amendment to the Company's  certificate or
articles of incorporation to evidence such increase.

     3.6 Reservation and Listing of Underlying Shares. (a) The Company shall (i)
in the time and manner required by any exchange,  market or quotation  system on
which the Common Stock is traded, prepare and file with such national securities
exchange or market or trading or quotation facility on which the Common Stock is
then listed,  an  additional  shares  listing  application  covering a number of
shares of Common Stock which is not less than the Initial Minimum, (ii) take all
steps  necessary to cause such shares of Common Stock to be approved for listing
on any such  national  securities  exchange  or market or trading  or  quotation
facility  on  which  the  Common  Stock  is then  listed,  as  soon as  possible
thereafter,  and (iii) provide to the Purchasers  evidence of such listing,  and
the Company  shall  maintain  the listing of its Common  Stock  thereon.  If the
number  of  Underlying  Shares  issuable  upon  conversion  in full of the  then
outstanding  Notes and upon  exercise  of the then  unexercised  portion  of the
Warrants  exceeds 85% of the number of Underlying  Shares  previously  listed on
account  thereof with any such required  exchanges,  then the Company shall take
the  necessary  actions to  immediately  list a number of  Underlying  Shares as
equals no less than the then Current Required Minimum.


                                      -13-
<PAGE>

          (b) The Company shall maintain a reserve of shares of Common Stock for
     issuance upon  conversion of the Notes in full and upon exercise in full of
     the Warrants in accordance with this Agreement, the Notes and the Warrants,
     respectively,  in such amount as may be required to fulfill its obligations
     in full under the Transaction Documents,  which reserve shall equal no less
     than the then Current Required Minimum.

     3.7 Conversion and Exercise  Procedures.  The Transfer Agent  Instructions,
Conversion  Notice (as  defined in the Notes) and Notice of  Exercise  under the
Warrants set forth the totality of the procedures with respect to the conversion
of the Notes and exercise of the Warrants,  including the form of legal opinion,
if necessary,  that shall be rendered to the Company's  transfer  agent and such
other information and instructions as may be reasonably  necessary to enable the
Purchasers to convert their Notes and exercise their Warrants as contemplated in
the Notes and the Warrants (as applicable).

     3.8 Conversion and Exercise  Obligations of the Company.  The Company shall
honor  conversions  of the Notes and exercises of the Warrants and shall deliver
Underlying Shares in accordance with the respective  terms,  conditions and time
periods set forth in the Notes and the Warrants.

     3.9 Right of First Refusal; Subsequent Registrations. (a) The Company shall
not,  directly  or  indirectly,   without  the  prior  written  consent  of  the
Purchasers,  offer, sell, grant any option to purchase,  or otherwise dispose of
(or  announce  any  offer,  sale,  grant  or any  option  to  purchase  or other
disposition)  any  of  its  or  its  Affiliates'  equity  or   equity-equivalent
securities  including  the issuance of any debt or other  instrument at any time
over life thereof  convertible  into or  exchangeable  for Common Stock,  or any
other transaction intended to be exempt or not subject to registration under the
Securities Act (a "Subsequent Placement") for a period of 180 Trading Days after
the Effective Date, provided, that such 180 Trading Day period shall be extended
for the number of Trading  Days during  such period (A) in which  trading in the
Common Stock is suspended by the securities exchange or such market or quotation
system  on which  the  Common  Stock is then  listed,  or (B)  during  which the
Underlying Shares Registration  Statement is not effective,  or (C) during which
the prospectus included in the Underlying Shares Registration  Statement may not
be used by the holders thereof for the resale of Underlying  Shares,  except (i)
the granting of options or warrants to employees,  officers and  directors,  and
the issuance of shares upon exercise of options granted,  under any stock option
or employee  stock purchase plan  heretofore or hereinafter  duly adopted by the
Company,  (ii) shares of Common Stock  issuable  upon  exercise of any currently
outstanding   warrants  and  upon   conversion  of  any  currently   outstanding
convertible securities of the Company, in each case disclosed in Schedule 2.1(c)
but not with respect to any amendments or modifications thereof (except pursuant
to the  foregoing  clause  (i)),  (iii)  shares of Common  Stock  issuable  upon
conversion  of Notes and upon  exercise of the Warrants in  accordance  with the
Notes or the Warrants,  (iv) up to 1,000,000  shares of Common Stock issued at a
fixed price of not less than $3.50 per share  (subject to  adjustment  for stock
splits)  and not  subject  to any  adjustment  or reset,  pursuant  to a private
placement transaction,  (v) securities issued pursuant to an underwritten public
offering by the  Company  (and not of any  securities  of a  shareholder  of the
Company  other than up to 4% of the holdings of the Chief  Executive  Officer of
the Company if such  participation  is required by the rules and  regulations of
the stock  market on which  such  offering  will take  place or by the rules and
regulations of the securities  authority  governing such stock market) resulting
in gross proceeds to the Company of not less than  $10,000,000,  where the price
per share of Common Stock offered is fixed and the  underwriter is an investment
bank  nationally  recognized in the United States of America (if the offering is
to be  conducted  in the United  States of America or in Great  Britain  (if the
offering is to be conducted in Great Britain) ("equity lines of credit" or their
equivalents  shall not satisfy  this  exception),  (iv)  issuance  pursuant to a
private  placement to Hollinger  International,  Inc.,  and (v) shares of Common
Stock issued as payment of the  purchase  price in  connection  with a Strategic
Transaction  (as defined below) (the offerings  specified in clauses  (i)-(v) of
this Section not being  deemed  Subsequent  Placements),  unless (A) the Company
delivers to each of the Purchasers a written notice (the  "Subsequent  Placement
Notice") of its intention to effect such Subsequent Placement,  which Subsequent
Placement Notice shall describe in reasonable  detail the proposed terms of such
Subsequent  Placement,  the amount of proceeds intended to be raised thereunder,
the Person with whom such Subsequent  Placement shall be effected,  and attached
to which shall be a term sheet or similar document relating thereto and (B) such
Purchaser  shall not have notified the Company by 5:00 p.m. (New York City time)
on the fifth Trading Day after its receipt of the Subsequent Placement Notice of
its  willingness to provide (or to cause its sole designee to provide),  subject
to completion of mutually acceptable documentation,  financing to the Company on
the same terms set forth in the Subsequent  Placement  Notice. If the Purchasers
shall  fail to  notify  the  Company  of  their  intention  to enter  into  such
negotiations  within such time  period,  the  Company may effect the  Subsequent
Placement substantially upon the terms and to the Persons (or Affiliates of such
Persons)  set  forth in the  Subsequent  Placement




                                      -14-
<PAGE>

Notice;  provided,  that the Company shall provide the Purchasers  with a second
Subsequent  Placement  Notice,  and the Purchasers shall again have the right of
first refusal set forth above in this paragraph (a), if the Subsequent Placement
subject  to  the  initial  Subsequent  Placement  Notice  shall  not  have  been
consummated for any reason on the terms set forth in such  Subsequent  Placement
Notice  within  thirty  Trading  Days after the date of the  initial  Subsequent
Placement Notice with the Person (or an Affiliate of such Person)  identified in
the Subsequent  Placement Notice. If the Purchasers shall indicate a willingness
to  provide  financing  in excess  of the  amount  set  forth in the  Subsequent
Placement  Notice,  then each Purchaser  shall be entitled to provide  financing
pursuant  to such  Subsequent  Placement  Notice up to an  amount  equal to such
Purchaser's  pro-rata  portion  of  the  aggregate  principal  amount  of  Notes
purchased by such Purchaser under this  Agreement,  but the Company shall not be
required to accept  financing  from the Purchasers in an amount in excess of the
amount  set forth in the  Subsequent  Placement  Notice.  For  purposes  of this
Section,  a "Strategic  Transaction" shall mean a transaction or relationship in
which the Company issues shares of Common Stock to an entity which is, itself or
through its  subsidiaries,  an  operating  company in a business  related to the
business of the Company and in which the Company receives  material  benefits in
addition to the  investment  of funds,  but shall not include a  transaction  in
which the  Company is issuing  securities  primarily  for the purpose of raising
capital.

          (b)  Except  for  (x)  Underlying   Shares,   (y)  other  "Registrable
     Securities" (as such term is defined in the Registration  Rights Agreement)
     to be  registered,  and  securities  of the Company  permitted  pursuant to
     Section 6(c) of the  Registration's  Rights Agreement to be registered,  in
     the  Underlying  Shares  Registration  Statement  in  accordance  with  the
     Registration Rights Agreement,  and (z) Common Stock permitted to be issued
     pursuant to paragraph (a)(i)- (v) of Section 3.9(a), the Company shall not,
     for a period of not less than 90  Trading  Days after the  Effective  Date,
     without the prior written  consent of the  Purchasers (i) issue or sell any
     of its or any of its  Affiliates'  equity or  equity-equivalent  securities
     pursuant to  Regulation S  promulgated  under the  Securities  Act, or (ii)
     register any securities of the Company. Any days that a Purchaser is unable
     to  sell  Underlying  Shares  under  the  Underlying  Shares   Registration
     Statement  shall be added to such 90 Trading Day period for the purposes of
     (i) and (ii) above.

     3.10 Certain Securities Laws Disclosures; Publicity. The Company shall: (i)
by the Business Day immediately following the Closing Date issue a press release
acceptable to the Purchasers  disclosing the transactions  contemplated  hereby,
(ii) file with the Commission a Report on Form 8-K  disclosing the  transactions
contemplated  hereby within ten Business Days after the Closing Date,  and (iii)
timely file with the Commission a Form D promulgated under the Securities Act as
required under  Regulation D promulgated  under the Securities Act and provide a
copy thereof to the Purchasers  promptly after the filing  thereof.  The Company
shall,  no less than two  Business  Days prior to the  filing of any  disclosure
required  by  clauses  (ii) and  (iii)  above,  provide  a copy  thereof  to the
Purchasers.  The Company and the  Purchasers  shall  consult  with each other in
issuing any press releases or otherwise making public  statements or filings and
other  communications  with the  Commission  or any  regulatory  agency or stock
market or trading facility with respect to the transactions  contemplated hereby
and neither party shall issue any such press release or otherwise  make any such
public  statement,  filings or other  communications  without the prior  written
consent  of the other,  which  consent  shall not be  unreasonably  withheld  or
delayed,  except that no prior consent  shall be required if such  disclosure is
required by law, in which such case the disclosing party shall provide the other
party with prior notice of such public statement, filing or other communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the names
of the Purchasers, or include the names of the Purchasers in any filing with the
Commission,  or any regulatory agency,  trading facility or stock market without
the  prior  written  consent  of  the  Purchasers,  except  to the  extent  such
disclosure  is  required by law,  in which case the  Company  shall  provide the
Purchasers with prior notice of such disclosure.

     3.11 Use of Proceeds.  The Company shall use the net proceeds from the sale
of the  Securities  hereunder  for  working  capital  purposes  and  not for the
satisfaction  of any portion of the Company's  debt (other than payment of trade
payables in the ordinary course of the Company's  business and prior practices),
to redeem any Company  equity or  equity-equivalent  securities or to settle any
outstanding litigation.

     3.12  Reimbursement.  If any  Purchaser,  other than by reason of its gross
negligence  or willful  misconduct,  becomes  involved  in any  capacity  in any
action,  proceeding or investigation brought by or against any Person, including
stockholders  of  the  Company,  in  connection  with  or  as a  result  of  the
consummation  of the  transactions  contemplated by Transaction  Documents,  the
Company  will  reimburse  such  Purchaser  for its  reasonable  legal  and other
expenses  (including the cost of any investigation and preparation)  incurred in
connection  therewith,


                                      -15-
<PAGE>

as such  expenses  are  incurred.  In  addition,  other than with respect to any
matter  in  which a  Purchaser  is a named  party,  the  Company  will  pay such
Purchaser the charges, as reasonably determined by such Purchaser,  for the time
of any  officers  or  employees  of such  Purchaser  devoted  to  appearing  and
preparing to appear as witnesses,  assisting in preparation for hearings, trials
or pretrial matters, or otherwise with respect to inquiries,  hearings,  trials,
and other  proceedings  relating to the subject  matter of this  Agreement.  The
reimbursement  obligations  of the  Company  under  this  paragraph  shall be in
addition to any  liability  which the Company may otherwise  have,  shall extend
upon the same terms and  conditions to any  Affiliates of the Purchasers who are
actually  named in such  action,  proceeding  or  investigation,  and  partners,
directors,  agents,  employees and controlling persons (if any), as the case may
be, of the  Purchasers  and any such  Affiliate,  and shall be binding  upon and
inure  to  the  benefit  of  any   successors,   assigns,   heirs  and  personal
representatives  of the Company,  the  Purchasers and any such Affiliate and any
such Person.  The Company also agrees that neither the  Purchasers  nor any such
Affiliates,  partners, directors, agents, employees or controlling persons shall
have any liability to the Company or any Person asserting claims on behalf of or
in  right  of  the  Company  solely  as a  result  of  the  consummation  of the
Transaction  Documents (as opposed to subsequent  breaching by the Purchasers of
obligations  hereunder) except to the extent that any losses,  claims,  damages,
liabilities or expenses incurred by the Company result from the gross negligence
or willful  misconduct of the applicable  Purchaser or entity in connection with
the transactions contemplated by this Agreement.

                                   ARTICLE IV
                                  MISCELLANEOUS

     4.1 Fees and  Expenses.  At the Closing,  the Company  shall  reimburse the
Purchasers  for their legal fees and expenses  incurred in  connection  with the
preparation and  negotiation of the Transaction  Documents by paying to Robinson
Silverman  $10,000  for  the  preparation  and  negotiation  of the  Transaction
Documents.  The amount contemplated by the immediately  preceding sentence shall
be retained by the  Purchasers  and shall not be delivered to the Company at the
Closing.  Other  than  the  amount  contemplated  in the  immediately  preceding
sentence,  and  except  as  otherwise  set  forth  in  the  Registration  Rights
Agreement, each party shall pay the fees and expenses of its advisers,  counsel,
accountants and other experts,  if any, and all other expenses  incurred by such
party  incident  to  the  negotiation,   preparation,  execution,  delivery  and
performance of this  Agreement.  The Company shall pay all stamp and other taxes
and duties levied in connection with the issuance of the Securities.

     4.2 Entire Agreement;  Amendments. The Transaction Documents, together with
the Exhibits and Schedules thereto and the Transfer Agent  Instructions  contain
the entire  understanding  of the parties  with  respect to the  subject  matter
hereof and supersede all prior agreements and  understandings,  oral or written,
with respect to such  matters,  which the parties  acknowledge  have been merged
into such documents, exhibits and schedules.

     4.3  Notices.  Any and all notices or other  communications  or  deliveries
required or permitted to be provided  hereunder shall be in writing and 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
telephone  number  specified in this Section  prior to 6:30 p.m.  (New York City
time) on a Business Day,  (ii) the Business Day after the date of  transmission,
if such notice or  communication  is delivered  via  facsimile at the  facsimile
telephone number specified in this Agreement later than 6:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the  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.  The address for such  notices and
communications shall be as follows:

         If to the Company:            Stockgroup.com Holdings, Inc.
                                       750 West Pender Street, Suite 500
                                       Vancouver, British Columbia
                                       Canada V6C 2T7
                                       Facsimile No.: (604) 331-1194
                                       Attn: Corporate Secretary

         With copies to:               Sierchio & Albert
                                       150 West 58th Street, 25th floor
                                       New York, NY 10155
                                       Facsimile No.: (212) 446-9504
                                       Attn: Joseph Sierchio, Esq.


                                      -16-
<PAGE>

         If to a Purchaser:       To the address set forth under such
                                  Purchaser's name on the
                                  signature pages hereto.

or such other  address as may be designated  in writing  hereafter,  in the same
manner, by such Person.

     4.4  Amendments;  Waivers.  No provision of this Agreement may be waived or
amended except in a written instrument  signed, in the case of an amendment,  by
the Company and each of the Purchasers or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought.  No waiver of any default
with respect to any provision,  condition or requirement of this Agreement shall
be  deemed  to be a  continuing  waiver  in the  future or a waiver of any other
provision,  condition or requirement  hereof, nor shall any delay or omission of
either party to exercise any right  hereunder in any manner  impair the exercise
of any such right accruing to it thereafter.

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

     4.6 Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of the parties and their  successors and permitted  assigns.  The
Company may not assign this  Agreement  or any rights or  obligations  hereunder
without  the prior  written  consent of the  Purchasers.  Except as set forth in
Section  3.1(a),  the  Purchasers  may not assign this  Agreement  or any of the
rights or  obligations  hereunder  without  the  consent  of the  Company.  This
provision  shall not limit  any  Purchaser's  right to  transfer  securities  or
transfer or assign rights under the Registration  Rights Agreement in accordance
with its terms.

     4.7 No  Third-Party  Beneficiaries.  This  Agreement  is  intended  for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person.

     4.8 Governing Law. The corporate laws of the State of Colorado shall govern
all issues  concerning the relative rights of the Company and its  stockholders.
All other  questions  concerning the  construction,  validity,  enforcement  and
interpretation of this Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard to
the  principles  of  conflicts of law  thereof.  Each party  hereby  irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of New York, borough of Manhattan,  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 the 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 any such court,  that such suit,  action or proceeding is
improper.  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  Agreement 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  manner
permitted by law.

     4.9 Survival.  The  representations,  warranties,  agreements and covenants
contained  herein shall  survive the Closing and the delivery and  conversion or
exercise (as the case may be) of the Notes and the Warrants.

     4.10 Execution. This Agreement may be executed in two or more counterparts,
all of which when taken  together shall be considered one and the same agreement
and shall become effective when  counterparts have been signed by each party and
delivered to the other  party,  it being  understood  that both parties need not
sign the same  counterpart.  In the event that any  signature  is  delivered  by
facsimile  transmission,  such  signature  shall  create  a  valid  and  binding
obligation  of the  party  executing  (or on  whose  behalf  such  signature  is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.


                                      -17-
<PAGE>

     4.11  Severability.  In case  any one or  more  of the  provisions  of this
Agreement  shall be invalid or  unenforceable  in any respect,  the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be  affecting  or impaired  thereby and the parties  will  attempt to
agree  upon a valid  and  enforceable  provision  which  shall  be a  reasonable
substitute  therefor,  and upon so agreeing,  shall  incorporate such substitute
provision in this Agreement.

     4.12  Remedies.  In  addition  to being  entitled  to  exercise  all rights
provided herein or granted by law,  including  recovery of damages,  each of the
Purchasers  will be entitled to specific  performance of the  obligations of the
Company under the Transaction Documents.  The Company and each of the Purchasers
agree  that  monetary  damages  may not be  adequate  compensation  for any loss
incurred by reason of any breach of its  obligations  described in the foregoing
sentence and hereby  agrees to waive in any action for specific  performance  of
any such obligation the defense that a remedy at law would be adequate.

     4.13  Independent  Nature  of  Purchasers'   Obligations  and  Rights.  The
obligations of each Purchaser under any Transaction  Document is several and not
joint with the  obligations  of any other  Purchaser  and no Purchaser  shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser under any Transaction  Document.  Nothing  contained  herein or in any
Transaction  Document,  and no action taken by any Purchaser  pursuant  thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint  venture  or any other kind of entity,  or create a  presumption  that the
Purchasers are in any way acting in concert with respect to such  obligations or
the transactions  contemplated by the Transaction Document. Each Purchaser shall
be entitled to independently  protect and enforce its rights,  including without
limitation  the  rights  arising  out of  this  Agreement  or  out of the  other
Transaction Documents,  and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.


                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                            SIGNATURE PAGES FOLLOWS]



                                      -18-
<PAGE>


     IN WITNESS  WHEREOF,  the parties hereto have caused this  Convertible Note
Purchase   Agreement  to  be  duly  executed  by  their  respective   authorized
signatories as of the date first indicated above.

                                    STOCKGROUP.COM HOLDINGS, INC.



                                    By:_____________________________________
                                       Name:
                                       Title:

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                      SIGNATURE PAGE FOR PURCHASER FOLLOWS]


<PAGE>


                                    DEEPHAVEN PRIVATE PLACEMENT TRADING LTD.


                                    By:_____________________________________
                                       Name:
                                       Title:

                                    Notes Purchase Price:             $2,000,000

                                    Number of Shares underlying
                                        Warrant:                         121,212

                                    Address for Notice:

                                    Deephaven Private Placement Ltd.
                                    c/o Deephaven Capital Management LLC
                                    130 Cheshire Lane
                                    Minnentonka, MN 55305
                                    Facsimile No.: (612) 249-5300
                                    Attn: Bruce Lieberman


         With copies to:            Robinson Silverman Pearce Aronsohn &
                                    Berman LLP
                                    1290 Avenue of the Americas
                                    New York, NY  10104
                                    Facsimile No.:  (212) 541-4630 and
                                    (212) 541-1432
                                    Attn:  Eric L. Cohen, Esq.




<PAGE>



                            AMRO INTERNATIONAL, S.A.


                         By: ___________________________
                             Name:
                             Title:

                         Notes Purchase Price:                        $1,000,000

                         Number of Shares underlying Warrant:             60,606

                         Address for Notice:

                         [               ]