Document:

Exhibit 10.4

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES REGULATORS 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, NOR MAY ANY INTEREST THEREIN 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 AS EVIDENCED BY, SUBJECT TO CERTAIN EXCEPTIONS,
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, IN FORM AND
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE
SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES
IN ACCORDANCE WITH APPLICABLE LAWS.

                              HOLLYWOOD MEDIA CORP.

                                CALLABLE WARRANT

Warrant No. 50                      Date of Original Issuance: February 10, 2004

         Hollywood Media Corp., a Florida corporation (together with any entity
that shall succeed to or assume the obligations of Hollywood Media Corp.
hereunder, the "Company"), hereby certifies that, for value received, Roth
Capital Partners, LLC or its registered assigns (the "Holder"), is entitled to
purchase from the Company up to a total of 288,667 shares of common stock, par
value $.01 per share (the "Common Stock"), of the Company (each such share, a
"Warrant Share" and all such shares, the "Warrant Shares") at an exercise price
equal to $2.84 per share (as adjusted from time to time as provided in Section
9, the "Exercise Price"), at any time and from time to time from and after the
date hereof and through and including February 10, 2009 (the "Expiration Date"),
and subject to the following terms and conditions:

         1. Definitions. In addition to the terms defined elsewhere in this
Warrant, capitalized terms that are not otherwise defined herein shall have the
meanings given to such terms in the Securities Purchase Agreement dated February
9, 2004 to which the Company and the Investors as therein described are parties
and as to which Roth Capital Partners, LLC is the placement agent (the "Purchase
Agreement"). The term "Common Stock" shall include the Company's common stock,
par value $.01 per share as authorized on the date of the Purchase Agreement and
any other securities or property of the Company or of any other person
(corporate or otherwise) which the Holder at any time shall be entitled to
receive on the exercise hereof in lieu of or in addition to such common stock,

<PAGE>

or which at any time shall be issuable in exchange for or in replacement of such
common stock.

         2. Registration of Warrant. The Company shall register this Warrant,
upon records to be maintained by the Company for that purpose (the "Warrant
Register"), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary from
the transferee and transferor.

         3. Registration of Transfers. Subject to Section 6, the Company shall
register the transfer of any portion of this Warrant in the Warrant Register,
upon surrender of this Warrant, with the Form of Assignment attached hereto duly
completed and signed, to the Company at its address specified herein. As a
condition to the transfer, the Company may request a legal opinion as
contemplated by the legend. Upon any such registration or transfer, a new
Warrant to purchase Common Stock, in substantially the form of this Warrant (any
such new Warrant, a "New Warrant"), evidencing the portion of this Warrant so
transferred shall be issued to the transferee and a New Warrant evidencing the
remaining portion of this Warrant not so transferred, if any, shall be issued to
the transferring Holder. The acceptance of the New Warrant by the transferee
thereof shall be deemed the acceptance by such transferee of all of the rights
and obligations of a holder of a Warrant.

         4. Exercise and Duration of Warrants. This Warrant shall be exercisable
by the registered Holder in whole or in part at any time and from time to time
on or after the date hereof to and including the Expiration Date. At 6:30 p.m.,
New York City time on the Expiration Date, the portion of this Warrant not
exercised prior thereto shall be and become void and of no value. Except as set
forth in Section 4A, the Company may not call or redeem all or any portion of
this Warrant without the prior written consent of the Holder.

         4A. Callable Warrant. This warrant may be redeemed by the Company at
any time after the date that is one year from the Date of Original Issuance upon
thirty (30) days advance written "Notice of Redemption" to Holder, for a price
of $0.01 per Warrant Share for which this Warrant is then exercisable, provided
that (i) a registration statement with the Securities and Exchange Commission is
then in effect as to the Shares and will be in effect as of a date thirty (30)
days from the date of giving the Notice of Redemption; (ii) that for a period of
twenty (20) Trading Days prior to the giving of the Notice of Redemption the
Common Stock has closed at a price of $5.68 per share or higher.

         5. Delivery of Warrant Shares.

         (a) To effect exercises hereunder, the Holder shall not be required to
physically surrender this Warrant upon exercise unless this Warrant ceases to be
further exercisable for additional Warrant Shares. Upon delivery of the Exercise
Notice to the Company (with the attached Warrant Shares Exercise Log) at its
address for notice set forth herein and upon payment of the Exercise Price
multiplied by the number of Warrant Shares that the Holder intends to purchase
hereunder, the Company shall promptly (but in no event later than three Trading

                                      -2-
<PAGE>

Days after the Date of Exercise (as defined herein)) issue and deliver to the
Holder, a certificate for the Warrant Shares issuable upon such exercise, which,
unless otherwise required by the Purchase Agreement, shall be free of
restrictive legends. The Company shall, upon request of the Holder and
subsequent to the date on which a registration statement covering the resale of
the Warrant Shares has been declared effective by the Securities and Exchange
Commission, use its best efforts to deliver Warrant Shares hereunder
electronically through the Depository Trust Corporation or another established
clearing corporation performing similar functions, if available, provided, that,
the Company may, but will not be required to change its transfer agent if its
current transfer agent cannot deliver Warrant Shares electronically through the
Depository Trust Corporation. A "Date of Exercise" means the date on which the
Holder shall have delivered to Company: (i) the Exercise Notice (with the
Warrant Exercise Log attached to it), appropriately completed and duly signed
and (ii) payment in full of the Exercise Price in immediately available funds or
federal funds for the number of Warrant Shares so indicated by the Holder to be
purchased.

         (b) If by the third Trading Day after a Date of Exercise the Company
fails to deliver the required number of Warrant Shares in the manner required
pursuant to Section 5(a), then the Holder will have the right to rescind such
exercise.

         (c) If by the third Trading Day after a Date of Exercise the Company
fails to deliver the required number of Warrant Shares in the manner required
pursuant to Section 5(a), and if after such third Trading Day and prior to the
receipt of such Warrant Shares, the Holder purchases in a bona fide arm's length
transaction for fair market value (in an open market transaction or otherwise)
the number of shares of Common Stock necessary to deliver in satisfaction of a
bona fide arm's length sale for fair market value by the Holder of the Warrant
Shares which the Holder was entitled to receive upon such exercise (a "Buy-In"),
then the Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder's total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the Holder's total sales price
(including brokerage commissions, if any) for the shares of Common Stock so sold
and (2) at the option of the Holder, either reinstate the portion of the Warrant
and equivalent number of Warrant Shares for which such exercise was not honored
or deliver to the Holder the number of shares of Common Stock that would have
been issued had the Company timely complied with its exercise and delivery
obligations hereunder. The Holder shall provide the Company written notice and
reasonably detailed documentation indicating the amounts requested by the Holder
in respect of the Buy-In.

         (d) The Company's obligations to issue and deliver Warrant Shares in
accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person, and irrespective of
any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of Warrant Shares. Nothing
herein shall limit a Holder's right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company's

                                      -3-
<PAGE>

failure to timely deliver certificates representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.

         6. Charges, Taxes and Expenses. Issuance and delivery of certificates
for shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrants in a name other than that of the
Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.

         7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity (which may include a surety bond), if requested. Applicants
for a New Warrant under such circumstances shall also comply with such other
reasonable regulations and procedures and pay such other reasonable third-party
costs as the Company may prescribe. If a New Warrant is requested as a result of
a mutilation of this Warrant, then the Holder shall deliver such mutilated
Warrant to the Company as a condition precedent to the Company's obligation to
issue the New Warrant.

         8. Reservation of Warrant Shares. The Company covenants that it will at
all times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares which are then issuable and deliverable
upon the exercise of this entire Warrant, free from preemptive rights or any
other contingent purchase rights of persons other than the Holder (taking into
account the adjustments and restrictions of Section 9). The Company covenants
that all Warrant Shares so issuable and deliverable shall, upon issuance and the
payment of the applicable Exercise Price in accordance with the terms hereof, be
duly and validly authorized, issued and fully paid and nonassessable.

         9. Certain Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 9.

            (a) Stock Dividends and Splits, Recapitalizations, Etc. If the
Company, at any time while this Warrant is outstanding, (i) pays a stock
dividend on its Common Stock or otherwise makes a distribution on any class of
capital stock that is payable in shares of Common Stock, (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, (iii)
combines outstanding shares of Common Stock into a smaller number of shares, or
(iv) undertakes any reclassification, recapitalization or other similar event
affecting the number of outstanding shares of Common Stock, then in each such

                                      -4-
<PAGE>

case the Exercise Price shall be appropriately adjusted. Any adjustment made
pursuant to clause (i) of this paragraph shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution, and any adjustment pursuant to clause (ii) or
(iii) of this paragraph shall become effective immediately after the effective
date of such subdivision or combination. If any event requiring an adjustment
under this paragraph occurs during the period that an Exercise Price is
calculated hereunder, then the calculation of such Exercise Price shall be
adjusted appropriately to reflect such event.

            (b) Pro Rata Distributions. If the Company, at any time while this
Warrant is outstanding, distributes to all holders of Common Stock (i) evidences
of its indebtedness, (ii) any security (other than a distribution of Common
Stock covered by the preceding paragraph), (iii) rights or warrants to subscribe
for or purchase any security, or (iv) any other asset (in each case,
"Distributed Property"), then in each such case the Exercise Price shall be
appropriately adjusted. Any adjustment made pursuant to this paragraph shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such distribution. If any event requiring an
adjustment under this paragraph occurs during the period that an Exercise Price
is calculated hereunder, then the calculation of such Exercise Price shall be
adjusted appropriately to reflect such event.

            (c) Fundamental Transactions. If, at any time while this Warrant is
outstanding, (1) the Company effects any merger or consolidation of the Company
with or into another Person, (2) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (3)
any tender offer or exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (4) the Company
effects any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property (in any such case, a
"Fundamental Transaction"), then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant (the "Alternate Consideration").
For purposes of any such exercise, the determination of the Exercise Price shall
be appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental
Transaction. At the Holder's option and request, any successor to the Company or
surviving entity in such Fundamental Transaction shall issue to the Holder a new
warrant substantially in the form of this Warrant and consistent with the
foregoing provisions and evidencing the Holder's right to purchase the Alternate
Consideration for the aggregate Exercise Price upon exercise thereof. Any such
successor or surviving entity shall be deemed to be required to comply with the
provisions of this paragraph (c) and shall insure that the Warrant (or any such
replacement security) will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction.

                                      -5-
<PAGE>

            (d) Number of Warrant Shares. Simultaneously with any adjustment to
the Exercise Price pursuant to paragraph (a) of this Section, the number of
Warrant Shares that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the adjusted number of Warrant
Shares shall be the same as the aggregate Exercise Price in effect immediately
prior to such adjustment.

            (e) Calculations. All calculations under this Section 9 shall be
made to the nearest cent or the nearest 1/100th of a share, as applicable. The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the disposition
of any such shares shall be considered an issue or sale of Common Stock.

            (f) Notice of Adjustments. Upon the occurrence of each adjustment
pursuant to this Section 9, the Company at its expense will promptly compute
such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment, including a statement of the adjusted
Exercise Price and adjusted number or type of Warrant Shares or other securities
issuable upon exercise of this Warrant (as applicable), describing the
transactions giving rise to such adjustments and showing in detail the facts
upon which such adjustment is based. Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and to the
Company's Transfer Agent. No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
such rate; provided, however, that any adjustments which by reason of this
Section 9(f) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment.

            (g) Notice of Corporate Events. If the Company (i) declares a
dividend or any other distribution of cash, securities or other property in
respect of its Common Stock, including without limitation any granting of rights
or warrants to subscribe for or purchase any capital stock of the Company or any
Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating
or solicits stockholder approval for any Fundamental Transaction or (iii)
authorizes the voluntary dissolution, liquidation or winding up of the affairs
of the Company, then the Company shall deliver to the Holder a notice describing
the material terms and conditions of such transaction, at least 20 calendar days
prior to the applicable record or effective date on which a Person would need to
hold Common Stock in order to participate in or vote with respect to such
transaction, and the Company will take all steps reasonably necessary in order
to insure that the Holder is given the practical opportunity to exercise this
Warrant prior to such time so as to participate in or vote with respect to such
transaction; provided, however, that the failure to deliver such notice or any
defect therein shall not affect the validity of the corporate action required to
be described in such notice.

         10. Payment of Exercise Price. Upon exercise of this Warrant the Holder
shall pay the Exercise Price in immediately available funds, or by cashless
exercise as follows:

         The Holder may notify the Company in an Exercise Notice of its election
to utilize cashless exercise, in which event the Company shall issue to the
Holder the number of Warrant Shares determined as follows:

                                      -6-
<PAGE>

                           X=Y [(A-B)/A]

                           where:

                                    X = the number of Warrant Shares to be
                                    issued to the Holder.

                                    Y = the number of Warrant Shares with
                                    respect to which this Warrant is being
                                    exercised.

                                    A = the average of the closing prices for
                                    the five Trading Days immediately prior to
                                    (but not including) the Exercise Date.

                                    B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction may be, if permitted under then-applicable SEC rules and
interpretations, deemed to have been acquired by the Holder, and the holding
period for the Warrant Shares may be deemed to have commenced, on the date this
Warrant was originally issued.

         11. INTENTIONALLY OMITTED.

         12. No Fractional Shares. No fractional shares of Warrant Shares will
be issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the closing price of one
Warrant Share as reported by Bloomberg L.P. (or the successor to its function of
reporting share prices) on the date of exercise.

         13. Notices. Any and all notices or other communications or deliveries
hereunder (including, without limitation, any Exercise Notice) 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 number specified in this Section prior to 6:30 p.m. (New York City
time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or
later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading
Day following the date of mailing, if sent and delivered by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. The addresses for such
communications shall be: (i) if to the Company, to Hollywood Media Corp., 2255
Glades Road, #221A, Boca Raton, Florida 33431. Attn: Chief Executive Officer,
Facsimile No.: (561) 998-2974, or (ii) if to the Holder, to the address or
facsimile number appearing on the Warrant Register or such other address or
facsimile number as the Holder may provide to the Company in accordance with
this Section.

         14. Warrant Agent. The Company shall serve as warrant agent under this
Warrant. Upon 30 days' notice to the Holder, the Company may appoint a new
warrant agent. Any corporation into which the Company or any new warrant agent

                                      -7-
<PAGE>

may be merged or any corporation resulting from any consolidation to which the
Company or any new warrant agent shall be a party or any corporation to which
the Company or any new warrant agent transfers substantially all of its
corporate trust or shareholders services business shall be a successor warrant
agent under this Warrant without any further act. Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder's last
address as shown on the Warrant Register.

         15. Miscellaneous.

             (a) This Warrant shall be binding on and inure to the benefit of
the parties hereto and the respective successors and assigns of the Holder it
being understood that transfers of this Warrant by the Holder are subject to the
legend set forth of the face hereof. Subject to the preceding sentence, nothing
in this Warrant shall be construed to give to any Person other than the Company
and the Holder any legal or equitable right, remedy or cause of action under
this Warrant. This Warrant may be amended only in writing signed by the Company
and the Holder and their successors and assigns.

             (b) All questions concerning the construction, validity,
enforcement and interpretation of this Warrant 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
agrees that all legal proceedings to resolve any dispute concerning the
interpretations, enforcement and defense of this Warrant and the transactions
herein contemplated ("Proceedings") (whether brought against a party hereto or
its respective Affiliates, employees or agents) shall be commenced exclusively
in the state and federal courts sitting in the City of New York, Borough of
Manhattan (the "New York Courts"), although depositions may be taken in other
locations. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any Proceeding, any claim that it is not personally subject to the jurisdiction
of any New York Court, or that such Proceeding has been commenced in an improper
or inconvenient forum. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such 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 Warrant 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. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Warrant or the transactions
contemplated hereby. If either party shall commence a Proceeding to enforce any
provisions of this Warrant, then the prevailing party in such Proceeding shall
be reimbursed by the other party for its attorney's fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Proceeding.

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

                                      -8-
<PAGE>

             (d) In case any one or more of the provisions of this Warrant shall
be invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Warrant shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to agree
upon a valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

             (e) The Company will not, by amendment of its Articles of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant against
such impairment.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
                             SIGNATURE PAGE FOLLOWS]

                                      -9-
<PAGE>

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

                                  HOLLYWOOD MEDIA CORP.

                                  By: /s/ Nicholas G. Hall
                                     -------------------------------------------
                                  Name: Nicholas G. Hall
                                  Title: Chief Operating Officer

                                      -10-
<PAGE>

                                 EXERCISE NOTICE

To Hollywood Media Corp.

         The undersigned hereby irrevocably elects to purchase _____________
shares of common stock, par value $.01 per share, of Hollywood Media Corp.
("Common Stock"), pursuant to Warrant No. 50, originally issued February 10,
2004 (the "Warrant"), and, if such Holder is not utilizing the cashless exercise
provisions set forth in the Warrant, encloses herewith $________ in cash,
federal funds or other immediately available funds, which sum represents the
aggregate Exercise Price (as defined in the Warrant) for the number of shares of
Common Stock to which this Exercise Notice relates, together with any applicable
taxes payable by the undersigned pursuant to the Warrant.

         The undersigned requests that certificates for the shares of Common
Stock issuable upon this exercise be issued in the name of

                           PLEASE INSERT SOCIAL SECURITY
                           OR TAX IDENTIFICATION NUMBER_________________________

                           (Please print name and address)______________________
                                                          ______________________
                                                          ______________________
                                                          ______________________

<PAGE>

                           Warrant Shares Exercise Log
                           ---------------------------

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Date            Number of Warrant        Number of Warrant Shares   Number of Warrant Shares
                Shares Available to be   Exercised                  Remaining to
                Exercised                                           be Exercised
--------------------------------------------------------------------------------------------
<S>             <C>                      <C>                        <C>

--------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                               FORM OF ASSIGNMENT

         [To be completed and signed only upon transfer of Warrant]

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the within
Warrant to purchase ____________ shares of Common Stock of Hollywood Media
Corp., Inc. to which the within Warrant relates and appoints ________________
attorney to transfer said right on the books of the Company with full power of
substitution in the premises.

Dated:   _______________, ____

                              --------------------------------------------------
                              (Signature must conform in all respects to name
                              of holder as specified on the face of the Warrant)

                              --------------------------------------------------
                              Address of Transferee

                              --------------------------------------------------

                              --------------------------------------------------

                              Tax Identification Number or Social Security
                              Number of Transferee

                              --------------------------------------------------

In the presence of:

--------------------------Exhibit 10.1

                               FACTORING AGREEMENT

MILBERG FACTORS, INC.
99 Park Avenue
New York, NY 10016

Gentlemen:

         We propose the following agreement with you, effective as of February
9, 2004 wherein we agree to retain you as our sole factor in accordance with the
terms, provisions and conditions as hereinafter stated:

         1. The undersigned, hereby sells, assigns, transfers and sets over to
you as absolute owner and you hereby agree to purchase from the undersigned,
without recourse to the undersigned to the extent expressly set forth below, all
Receivables now or hereafter owned by us which are acceptable to you. You hereby
agree to assume the risk of loss resulting from a customer's nonpayment of an
approved Receivable due to the customer's financial inability at maturity to pay
such Receivable (including financial inability to pay arising out of the filing
of a bankruptcy or insolvency proceeding in respect of such customer). You shall
not be responsible, however, for nonpayment due to any reason other than such
inability to pay. The term "Receivables" means and includes all accounts,
accounts receivable, notes, bills, acceptances and any and all other forms of
obligations owing to us, whether secured or unsecured, all proceeds thereof and
all of our rights to any merchandise which is represented thereby (delivered or
undelivered), including all of our rights of stoppage in transit, replevin and
reclamation as an unpaid vendor or lienor. You shall be privileged to enjoy all
of the rights and remedies of the seller of such goods and shall be and become
subrogated to all guaranties, collateral and other rights possessed by us or due
to come into our hands, but you shall not be liable in any manner for exercising
or refusing to exercise any rights thereby bestowed. From time to time we shall
provide you with schedules describing all Receivables created or acquired by us
and shall execute and deliver to you at your offices in the City of New York
written assignments of such Receivables to you and shall furnish at the same
time copies of customers' invoices or the equivalent, together with original
shipping or delivery receipts for all merchandise sold and/or all notes, bills,
acceptances or other evidences of customer indebtedness duly endorsed in blank
by us, and any other information or documents you may call upon us from time to
time to submit, all in form satisfactory to you. Receivables not approved by you
as provided below in whole or in part (including any Receivables outstanding on
the date hereof) shall bear the factoring charge described below, and are hereby
assigned to you with full recourse to the undersigned to the extent and in the
respects not so approved.

         2. The amounts and terms of each sale to our customers shall be
submitted to you for your credit approval in writing and no sales or deliveries
shall be made without such written approval, which may be withdrawn at any time
before delivery, but in no event shall you have any credit risk on any
Receivable, whether or not approved by you, if the net face amount of such
Receivable is less than $150.00, or the invoice evidences charges for samples
supplied to our customer. Your factoring charge, due and payable at time of
purchase, shall be eighty one hundredths of one percent (0.80%) of the gross
amount of said Receivables, less any trade and cash discounts to customers
(which shall be computed on the shortest terms where optional terms are given);
but in no event shall your factoring charge on any invoice evidencing a
Receivable purchased hereunder be less than five dollars. You agree, however, to
reduce this minimum invoice charge to one dollar per invoice during any month in
which we transmit substantially all factored invoices to you electronically. In
the event that the terms of any of our sales exceeds 60 days, you shall receive
as to such sales an additional 1/4 of one percent for each additional 30 days,
or portion thereof, of extended terms or additional dating. In addition, with
prior written notice to us, you may from time to time impose a surcharge with
respect to Receivables from customers who are debtors-in-possession under the
Federal Bankruptcy Code, other high-risk customers or customers located outside
the United States. The purchase price of Receivables accepted by you is to be
the net face amount thereof less your factoring charge. The term "net face
amount" means the gross amount of Receivables, less trade and cash discounts

                                       1
<PAGE>

to customers (which shall be computed on the shortest terms where optional terms
are given) and credits and allowances to customers of any nature. After purchase
of Receivables by you, a discount, credit or allowance may be claimed solely by
the customer and the customer and the undersigned will not issue or grant any
discounts, credits or allowances to a customer without your prior consent. At
the time of purchase of Receivables and periodically thereafter, you may in your
sole and absolute discretion make advances to us and/or arrange for the issuance
of letters of credit for our benefit which advances and letters of credit, in
the aggregate and at anytime outstanding, will not exceed the lesser of (i)
$3,500,000 (the "Maximum Revolving Amount"), or (ii) eighty percent (80%) of
the purchase price, and you will credit to our account the balance of said
purchase price less any monies remitted, paid or otherwise advanced by you for
our account and less returns, trade and cash discounts, credits or allowances of
any nature at anytime issued, owed, granted or outstanding, upon the respective
collection of such Receivables, after adding thereto five (5) banking days to
cover mailing time, delays in remittances and clearance of checks, or, in the
case of approved Receivables, upon their respective uncollectability because of
the customer's financial inability at maturity to pay same. Notwithstanding the
foregoing, it is understood that you may, at our request, from time to time
advance a sum that is more or less than the sum determined by the application of
the above percentage of the purchase price and may, in fact, make advances in
excess of the Maximum Revolving Amount but you are under no obligation to do so;
all advances in excess of the aforesaid percentage, less all applicable
deductions, charges, chargebacks and reserves, and all advances in excess of the
Maximum Revolving Amount, are repayable on demand. Amounts taken by customers
for anticipation shall be charged to our account by you. The minimum aggregate
factoring charges payable under this Agreement for each contract year hereof
shall be two hundred thousand dollars ($200,000), which, to the extent of any
deficiency, shall be chargeable to our account with you on a monthly basis
(i.e., to the extent the monthly factoring charge is less than $16,666.66, the
deficiency shall be chargeable to our account). You shall be entitled to hold
all sums and all property of the undersigned at any time to our credit or in
your possession, or upon or in which you have a lien or security interest, as
security for all of our obligations at any time owing to you and to each
corporation which is at any time your parent, affiliate, subsidiary or a
co-subsidiary of your parent. Such obligations shall include, without
limitation, all obligations to you hereunder and all obligations for purchases
made by the undersigned from any other client factored or financed by you or by
any such parent, affiliate, subsidiary or co-subsidiary, whether under this
agreement or otherwise, no matter how or when arising and whether due or to
become due, and you shall have the right to charge to our account the amount of
all such obligations and pay over such amounts to such parent, affiliate,
subsidiary or co-subsidiary. Recourse to security shall not at any time be
required, and we shall at all times remain liable to you and such parent,
affiliate, subsidiary or co-subsidiary on demand for all loans and advances
(including any advances in excess of the net face amount of Receivables) to or
for our account and for all of our other obligations to you. You may at your
option reserve an amount of past sales (the "Reserve"), and revise said Reserve
from time to time, if in your sole judgment it is necessary to cover possible
returns of merchandise, deductions or other claims or setoffs made by customers.

         3. Subject to the provisions of this Agreement, upon our request, you
shall remit (and at any time in your sole discretion you may remit) any money
standing to our credit on your books in excess of the Reserve. You may charge to
our account interest on any monies remitted or otherwise advanced by you or
charged to our account hereunder (the "Advances") before the collection of
Receivables or in the case of approved Receivables, before their respective
uncollectability because of the customer's financial inability at maturity to
pay same as above described, at a rate three-quarters of one percent (.75%) per
annum above the highest publicly announced "reference", "prime" or "base"
interest rate of JPMorgan Chase Bank or The Bank of New York (the "Prime Rate"),
(which is now four percent (4%) per annum) computed on the basis of a 360 day
year (the "Effective Rate"); provided, however, that interest on Advances which
are in excess of eighty percent (80%) of the net face amount of outstanding
Receivables purchased hereunder, less the Reserve, disputed accounts and
unapproved Receivables will bear interest at a rate one percent (1%) per annum
in excess of the Effective Rate. Said Effective Rate shall be increased or
decreased effective the first day of the month following any month in which
there is an increase or decrease in the Prime Rate, such increase or decrease to
be in an amount equal to the increase or decrease in such Prime Rate; provided,
however, that in no event shall such Effective Rate be decreased below the rate
of four and three quarters percent (4.75%) per annum. Such interest is due and
payable at the close of each month. You

                                       2
<PAGE>

will account to us monthly and each monthly accounting will be fully binding
upon us unless we give you written notice of exceptions within sixty (60) days
from its date.

         4. We warrant and agree as to each such Receivable that at the time of
the sale or assignment thereof to you hereunder and at all times thereafter: it
will be a bona fide existing obligation created by the absolute sale and
delivery of merchandise or the rendition of services to customers in the
ordinary course of business and will be paid and performed according to the
terms provided therein; all documents delivered to you in connection therewith
are genuine; it will be enforceable against all parties thereto without credit,
defense, offset or counterclaim, real or claimed, whether arising out of the
transaction creating such Receivable or otherwise; and it will be free and clear
of liens and encumbrances. We further warrant and agree as to each such
Receivable that at the time of the sale or assignment thereof to you hereunder
we will have good title thereto and good right to sell, assign, transfer and set
over such Receivable to you. All invoices to customers shall state plainly on
the face thereof that the accounts receivable represented by such invoices have
been assigned and are payable only to you. You may prepare and mail all
customers' invoices, and billings of such customers' invoices by whomsoever done
shall constitute an assignment to you of the Receivables represented thereby
whether or not the undersigned executes any other specific instrument of
assignment. We hereby further warrant and agree that the customer in each
instance has received and will accept the merchandise sold or the services
rendered and the invoice therefor without dispute or claim in any respect
whatsoever, including, without limitation, disputes as to price, terms or
quality and defenses based on force majeure. We will notify you promptly of and
shall at our own cost and expense settle all disputes and claims and will pay
you promptly the amount of the Receivables affected thereby, as well as the
amount of any unapproved Receivable if unpaid at its due date. If you so elect
you are to have and are hereby granted the right and option at all times to
settle, compromise, adjust or litigate all disputes or claims directly with the
customer or other complainant upon such terms and conditions as you deem
advisable, and also the right to take possession of and to sell or cause to be
sold without notice any returned merchandise, at such prices, to such purchasers
and upon such terms as you deem advisable, and in any case to charge the
deficiencies, costs and expenses thereof (including attorneys' fees) to us. In
addition to all other rights hereunder, you may charge against our account the
full net face amount of any Receivable where there is such dispute, defense,
offset, claim and/or counterclaim (regardless of the extent or nature thereof or
whether arising out of the transaction creating such Receivable or otherwise) or
where the customer fails or refuses to pay the amount due for any reason other
than the customer's financial inability at maturity to pay, or if any unapproved
Receivable is unpaid at its due date, but such chargeback shall not be deemed a
re-assignment thereof, and title to such Receivable shall remain in you until
such Receivable is fully paid, settled or discharged. If monies are due and
owing from a customer for both credit-approved and non credit-approved
Receivables, any payments or recoveries received on such Receivables will be
applied first to any credit-approved Receivables. We hereby agree to indemnify
and hold you harmless against and in respect of any and all liability, loss or
expense (including attorneys' fees) arising out of or relating to any breach of
warranty or covenant on our part. Any merchandise which is returned by customers
or otherwise recovered shall be set aside, marked in your name and held by us as
your trustee. We exonerate you from any liability for any loss, depreciation or
other damage to Receivables unless caused by your willful and malicious act. We
agree to execute such further instruments as may be required or permitted by any
law relating to notices of or affidavits in connection with assignments of
accounts receivable and to cooperate with you in the filing or recording and
renewal thereof. As additional security for all of our obligations to you, as
hereinabove defined, the undersigned hereby grants you a continuing security
interest in all Accounts, General Intangibles and Contract Rights (as said terms
are defined in Article 9 of the Uniform Commercial Code) now existing or
hereafter acquired by us and all proceeds thereof. Each sale of Receivables
hereunder shall constitute and be a transaction separate from and independent of
each other, but all such transactions shall be subject to and governed by each
and every of the terms, provisions and conditions of this agreement. During the
term of this agreement we shall not sell, negotiate, pledge or assign or grant
any security interest in any Receivables, Accounts, General Intangibles,
Contract Rights or inventory to any one other than you without your prior
consent, nor shall we grant or permit to exist without your prior consent any
mortgage, pledge, security interest, encumbrance or lien of any kind upon any of
our property, except liens for taxes not yet due, liens incidental to our
business which were not incurred in connection with the borrowing of

                                       3
<PAGE>

money or obtaining of advances or credit and which do not in the aggregate
materially detract from the value of our assets or impair the use thereof in the
operation of our business. We authorize you to file such financing statements
under the Uniform Commercial Code as you may deem necessary or advisable to
perfect the security interests we have granted to you under or in connection
with this Agreement or otherwise. We appoint Stephen R. Murphy or any other
person whom you may designate as our attorney with power: to endorse our name on
any checks, notes, acceptances, money orders, drafts or other forms of payment
or security that may come in your possession; to sign our name on any invoice or
bill of lading relating to any Receivable, on drafts against customers, on
schedules of assignment of Receivables, on notices of assignment and public
records, on verification of accounts and on notice to customers; to notify the
post office authorities to change the address for delivery of our mail to an
address designated by you; to receive, open and dispose of all mail addressed to
us; to send requests for verification of accounts to customers; and to do all
other things you deem necessary to carry out this Agreement. We hereby ratify
and approve all acts of the attorney and neither you nor the attorney will be
liable for any acts of commission or omission, nor for any error of judgment or
mistake of fact or law. This power, being coupled with an interest, is
irrevocable so long as any Receivable sold to you remains unpaid or any money
remains due to you from us. We shall immediately place notations upon our books
of account to disclose the assignment of all Receivables, accounts, general
intangibles and contract rights to you.

         5. The undersigned will repay upon demand all our obligations to you
and in addition thereto all costs and expenses, including without limitation
reasonable attorneys' fees, incurred to obtain or enforce payment of any
obligation of the undersigned to you, or in the prosecution or defense of any
action or proceeding either against you or us concerning any matter arising out
of or relating to this Agreement, the Receivables, any collateral pledged in
your favor and/or any of our obligations to you, including, without limitation,
to defend successfully, in whole or in part, any and all actions or proceedings
brought by the undersigned. In addition, we agree to reimburse you for the
amount of all filing and search fees, reasonable attorneys' fees, costs and
expenses incurred by you in connection with the negotiation, preparation,
closing, administration and enforcement of this agreement and any ancillary
documents issued in connection herewith and modifications and additions to any
of them. We shall also pay your customary charges for all services performed by
you for us at our request and all banking facility charges incurred in
connection with the opening and operation of our account with you, and we shall
also pay you your customary charges for any field examination, collateral
analysis or other business analysis, the need for which is determined by you,
plus all costs and disbursements incurred by you in the performance of such
examinations or analysis. If any remittances are made directly to us, we shall
hold the same as your property and immediately deliver them to you in their
original form. We hereby waive presentment and protest of any instrument and
notice thereof, notice of default and any other notices to which we might
otherwise be entitled. All sales of Receivables to you by us shall be deemed to
include all of our right, title and interest to all of our books, records, files
and all other data and documents relating to each Receivable. If any tax by any
governmental authority is imposed on any transaction between us, or in respect
to sales or the merchandise affected by such sales, which you are or may be
required to withhold or pay, we agree to indemnify and hold you harmless in
respect of such taxes, and we will repay you the amount of any such taxes, which
may be charged to our account.

         6. We warrant that we are solvent and will so remain during the terms
of this Agreement. We agree to furnish to you year-end financial statements
certified by our regularly employed Certified Public Accountant, such unaudited
financial statements and financial information as you shall reasonably request,
copies of each filing made by us with the Securities and Exchange Commission
(including, without limitation, Forms 10-Q, 10-K and 8-K, and all registration
statements) and each press release issued by us, within two business days of
such filing or issuance, and, on each anniversary hereof, a list of our 5% or
greater shareholders, officers and directors. We hereby represent, warrant and
covenant to you that: (a) the execution, delivery and performance of this
Agreement, any supplements hereto and all related documents, the sale of
Receivables hereunder, the borrowing of loans and advances hereunder and
thereunder, if any, and the grants of security interests hereunder and
thereunder, do not and will not (i) violate in any material respect the
provisions of any applicable law, statute, rule, regulation, order or decree to
which we are subject, (ii) conflict with, result in a breach of, or constitute a
default under, our certificate of incorporation

                                       4
<PAGE>

or by-laws, or, in any material respect, any indenture, agreement or other
instrument to which we are a party, or by which we or any of our property may be
bound, or (iii) result in the creation or imposition of any security interest,
mortgage, pledge or other lien upon any property now owned or hereafter acquired
by us, other than the security interests granted to you hereunder; (b) the
operation of our business is and will remain in compliance in all material
respects with all applicable laws including all applicable environmental laws
and regulations and all applicable state and federal laws and regulations; (c)
based upon the Employee Retirement Income Security Act of 1974 ("ERISA") and the
regulations and published interpretations thereunder (i) we have not engaged in
any Prohibited Transactions as defined in Section 406 of ERISA and Section 4975
of the Internal Revenue Code, as amended, (ii) we have met all applicable
minimum funding requirements under Section 302 of ERISA in respect of our plans,
(iii) we have no knowledge of any event or occurrence which would cause the
Pension Benefit Guaranty Corporation to institute proceedings under Title IV of
ERISA to terminate any employee benefit plan(s), (iv) we have no fiduciary
responsibility for investments with respect to any plan existing for the benefit
of persons other than our employees and (v) we have not withdrawn, completely or
partially, from any multiemployer pension plan so as to incur liability under
the Multiemployer Pension Plan Amendments Act of 1980; (d) we are a corporation
duly incorporated, validly existing and in good standing under the laws of the
state of our incorporation and are and will remain duly licensed and qualified
to do business and are in good standing in all other states wherein the nature
of our business makes licensing or qualification as a foreign corporation
necessary and wherein the failure to be so licensed or qualified could have a
material adverse effect on our condition, business or operations; (e) except as
disclosed on Schedule A hereto, there are no pending or threatened
investigations, actions or proceedings before or by any court, governmental
department, commission, board, bureau or administrative agency which if
adversely determined would materially affect our condition, business or
operations; (f) we own and have good and marketable title to all of the
Receivables, goods and chattels and other assets real and personal in which a
lien or security interest is given to you under your security agreements free
and clear of all liens, charges and encumbrances; (g) except as disclosed on
Schedule A hereto, we have filed all material tax returns and paid all material
United States federal, state and local taxes, and non-U.S. taxes, other than
taxes not yet due or which may hereafter be paid without penalty, and have no
knowledge of any deficiency or additional assessment in connection therewith not
provided for on our books, and will continue to do so during the term hereof;
(h) we are (i) in compliance with, and (ii) have procured and are now in
possession of, all material licenses or permits required by any applicable
United States federal, state or local or non-U.S. law or regulation for the
operation of our business in each jurisdiction wherein we are now conducting or
propose to conduct business; (i) we are not in default in the payment of the
principal of or interest on any indebtedness for borrowed money or, in any
material respect, under any instrument or agreement under and subject to which
any indebtedness for borrowed money has been issued and no event has occurred
under the provisions of any such instrument or agreement which with or without
the lapse of time or the giving of notice, or both, constitutes or would
constitute an event of default thereunder; (j) we will promptly inform you of:
(i) the commencement of all proceedings and investigations by or before any
governmental or nongovernmental body and all actions and proceedings in any
court or before any arbitrator against or in any way concerning any of our
properties, assets or business, which might singly or in the aggregate, have a
materially adverse effect on us, (ii) any amendment of our certificate of
incorporation or by-laws, (iii) any change in our business, assets, liabilities,
financial condition, results of operations or business prospects which has had
or might have any materially adverse effect on us, (iv) any default or Event of
Default hereunder or any event which with the passage of time or giving of
notice or both would constitute a default or Event of Default, (v) any default
or any event which with the passage of time or giving of notice or both would
constitute a default under any agreement for the payment of money to which we
are a party or by which we or any of our properties may be bound or which would
have a material adverse effect on our business, operations, property or
financial condition, (vi) any change in the location of our places of business,
and (vii) any change in our corporate name; (k) all financial projections
prepared by us or at our direction and delivered to you will represent, at the
time of delivery to you, our best estimate of our future financial performance
and will be based upon assumptions which are valid in light of the then current
business conditions; (l) all balance sheet and income statements which have been
delivered to you fairly, accurately and properly state our financial condition
and there has been no material adverse change in our financial condition as
reflected in such statements since the date of the latest thereof and such
statements do not fail to disclose any fact or facts which might materially and

                                       5
<PAGE>

adversely affect our financial condition; (m) we will not hereafter incur
indebtedness for borrowed money, except to you and except for indebtedness
incurred by our Hong Kong subsidiary, International SMC (HK) Limited, in an
aggregate amount not to exceed $5,000,000, provided that we shall not incur any
liability in respect thereof, whether by guarantee or otherwise; (n) we will not
guarantee or endorse the obligations of any person, firm or corporation, except
in the ordinary course of business, enter into any merger or consolidation, or
purchase or otherwise acquire the stock or any material obligations or assets of
any person, firm, corporation or other enterprise; (o) Yi Ping Chan will not
cease to be our Chief Operating Officer, and Josef A. Bauer will not cease to be
a director and significant shareholder; (p) we will not pay any management fees
or make any similar payments or declare any dividends, except dividends payable
exclusively in our stock, or redeem any of our stock or make any other payments
in respect of our stock that are the equivalent to dividends or stock redemption
payments, to any shareholder or affiliate as long as any debts and obligations
hereunder remain outstanding without your express prior written consent; and (q)
we will not issue any guarantees of the obligations of any third person or
entity as long as any debts and obligations hereunder remain outstanding,
without your express prior written consent.

         7. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of New York applicable to contracts to be performed
wholly within the State of New York and shall have an initial term of two years
from its effective date and thereafter shall be automatically renewed for
successive periods of two years unless terminated by either you or us at the
conclusion of its initial term or any renewal term by giving the other at least
sixty (60) days prior written notice. If the aggregate purchase price of
approved Receivables you credit to our account in any contract year as a result
of their respective uncollectability because of the customer's financial
inability at maturity to pay same (net of recoveries thereon) exceeds
one-hundred percent (100%) of the aggregate factoring charges (i.e.,
commissions) posted to our account with respect to such contract year, then you
shall have the option to extend the term of this Agreement for an additional one
(1) year period beyond the expiration of the term during which such event
occurs. As so extended, the renewal and termination provisions of this paragraph
will continue to apply. You will endeavor to give us timely written notice of
such extension, but your failure to do so will not constitute a breach of, or
otherwise impair your ability to extend, this Agreement. The mailing of a
registered or certified letter of notice addressed by one party to the other at
its usual address shall constitute sufficient notice which shall be effective
for the purposes set forth therein on the appropriate date specified in such
letter.

Notwithstanding the foregoing, you may terminate this Agreement, without notice,
upon the occurrence of any one or more of the following events (an "Event of
Default"): (a) default in the payment or performance, when due or payable, of
any payment required under this Agreement or under any future agreement or
supplement with you or under any agreement to which we are a party with third
parties; (b) any warranty, representation, or other statement made or furnished
to you by us or on our behalf or by any guarantor of our obligations hereunder
or in connection herewith or in any instrument furnished in compliance with or
in reference to this Agreement proves to have been false or misleading in any
material respect when made or furnished or becomes false in any material
respect; (c) we fail or neglect to perform, keep or observe any term, provision,
condition, covenant, warranty or representation contained in this Agreement or
in any other agreement between us or any rider or supplement which is required
to be performed, kept or observed by us; (d) any statement, report, financial
statement, or certificate made or delivered by us, or by any of our officers,
employees or agents, to you or filed with the Securities and Exchange Commission
is not true and correct in any material respect; (e) the imposition of a lien or
encumbrance on any of our assets, including the Receivables, or the making of
any levy, seizure, or attachment on all or any of our assets, including the
Receivables; (f) any material adverse change in our financial condition or the
financial condition of any guarantor of our obligations hereunder; (g) we or any
guarantor of our obligations hereunder become insolvent, or unable to meet our
debts as they mature, or fail, suspend or go out of business or a case is
commenced under the Bankruptcy Code or an order for relief in a case under the
Bankruptcy Code is entered with respect to us or any such guarantor, or a
custodian or receiver (or other court designee performing the functions of a
receiver) is appointed for or takes possession of either our or any such
guarantor's assets or affairs; (h) we or any guarantor of our obligations
hereunder cease to conduct our business as now conducted or are enjoined,
restrained or in any

                                       6
<PAGE>

way prevented by court, governmental or administrative order from conducting all
or any material part of our business affairs; (i) a notice of any lien, levy or
assessment is filed of record with respect to all or any of our assets by the
United States, or any department, agency or instrumentality thereof, or by any
state, county, municipal or other governmental agency, including, without
limitation, the Pension Benefit Guaranty Corporation, or if any taxes or debts
owing at any time or times hereafter to any one of them becomes a lien or
encumbrance upon any of the Receivables or any of our other assets and the same
is not released within thirty (30) days after the same becomes a lien or
encumbrance; (j) you shall in good faith deem yourself insecure or unsafe; (k)
any guaranty given you with respect to our obligations is limited or terminated
or otherwise deemed unenforceable or invalid; (1) death of a guarantor of our
obligations hereunder or in connection herewith which guaranty is not replaced
by a guarantor, acceptable to you in your sole discretion; (m) we shall fail to
pay our taxes when due unless such taxes are being contested in good faith by
appropriate proceeding and with respect to which adequate reserves have been
provided on our books; (n) should there be a sale or transfer of all or
substantially all of our assets or any material change in our shareholdings; (o)
should our Tangible Net Worth (as customarily defined under GAAP) be less than
$7,500,000; or (p) should our Working Capital (as customarily defined under
GAAP) be less than $7,500,000. Upon the effective date of termination for
whatever reason, all moneys chargeable to our account under this Agreement shall
be immediately due and payable without further notice or demand. Notwithstanding
termination, until all your rights and all our obligations hereunder (including
without limitation the payment in full of all moneys chargeable to our account
under this Agreement and the provision of an indemnity as provided in the last
sentence of this Agreement) have been fully satisfied, (i) we shall continue to
assign to you and grant you a security interest in all Receivables then existing
or thereafter arising, shall not factor or assign Receivables, or grant a
security interest therein, to any other person or entity, shall state on the
face of all invoices that the Accounts Receivable represented by such invoices
have been assigned and are payable only to you, and shall immediately deliver
any remittances to you in their original form, (ii) all of our obligations and
all of your rights and powers with respect to Receivables then existing or
thereafter arising, with respect to other security then existing or thereafter
arising or acquired, and with respect to transactions or events occurring prior
to the effective date of such termination shall be unaffected and unimpaired by
such termination, and (iii) all of our representations, warranties, covenants
and agreements and all other provisions binding upon us contained herein shall
survive and continue in full force and effect, and shall be fully operative.

         8. Failure by you to exercise any right, remedy or option under this
Agreement or delay by you in exercising the same will not operate as a waiver;
no waiver or consent by you will be effective unless it is in writing and then
only to the extent specifically stated. This Agreement cannot be changed or
terminated other than by a writing signed by the party to be charged, is our
entire contract, and is for the benefit of and binding upon the parties hereto
and their respective successors and assigns, heirs, executors, administrators
and personal representatives. Your rights and remedies under this agreement will
be cumulative and not exclusive of any other right or remedy which you may have.
Both parties agree that all actions and proceedings directly or indirectly
relating to this Agreement will be litigated exclusively in the federal or state
courts located in the County and State of New York and that such courts are
convenient forums and both parties submit to the personal jurisdiction of such
courts. BOTH YOU AND WE WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY LITIGATION
RELATING TO TRANSACTIONS UNDER THIS AGREEMENT, SUPPLEMENTS HERETO AND ANY
RELATED AGREEMENTS, AND WE AGREE NOT TO ASSERT ANY COUNTERCLAIM OF ANY NATURE IN
SUCH LITIGATION. In the event that you cease to act as factor for us hereunder,
we agree to furnish to you an indemnity satisfactory to you against any item
which could be charged to us under the terms hereof which may in

                                       7
<PAGE>

your sole and absolute discretion include the retention of any property held by
you or the holding by you without interest from the date of termination of any
balance standing to our credit, as security for our obligations hereunder.

                  Attest:                Very truly yours,

                                         THE SINGING MACHINE COMPANY, INC.

/s/ April Green                          By: /s/ Yi Ping Chan
-------------------------                    ------------------------------
                                            Yi Ping Chan, Interim CEO & COO

                  (Seal)                 Date:  February 9, 2004

                                         Address: 6601 Lyons Road, Building A-7
                                                  Coconut Creek, FL 33073

                  Attest:
                                         Accepted at New York, N.Y.

                                         MILBERG FACTORS, INC.

/s/ Stephen R. Murphy                    By: /s/ Daniel R. Milberg
-------------------------                    -------------------------
Stephen R. Murphy,                           Daniel R. Milberg,
Senior Vice President,                       Senior Vice President
Secretary & Treasurer

                  (Seal)

                                       8
<PAGE>

                                   Schedule A
                                   ----------

Section 6(e) and 6(g)

                                       9

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