Document:

EXHIBIT 4.2

                          REGISTRATION RIGHTS AGREEMENT

            This  Registration  Rights Agreement (this  "AGREEMENT") is made and
entered into as of April 23, 2004, by and  among TNX Television Holdings,  Inc.,
a Delaware corporation (the "COMPANY"), and the investors signatory hereto (each
a "INVESTOR" and collectively, the "INVESTORS").

            This  Agreement  is  made  pursuant  to  the   Securities   Purchase
Agreement,  dated as of the date hereof among the Company and the Investors (the
"PURCHASE AGREEMENT").

            The Company and the Investors hereby agree as follows:

      1.  Definitions.  Capitalized  terms used and not otherwise defined herein
that are defined in the Purchase  Agreement  shall have the meanings  given such
terms in the Purchase Agreement. As used in this Agreement,  the following terms
shall have the respective meanings set forth in this Section 1:

            "COMMISSION" means the Securities and Exchange Commission.

            "EFFECTIVE  DATE" means the date that a  Registration  Statement  is
first declared effective by the Commission.

            "EFFECTIVENESS  DATE" means:  (a) with  respect to the  Registration
Statement  required to be filed under Section 2(a), the earlier of: (i) the 90th
day following the Closing Date;  provided,  that, if the Commission  reviews and
has written comments to the filed Registration  Statement that would require the
filing  of a  pre-effective  amendment  thereto  with the  Commission,  then the
Effectiveness  Date under this clause (i) shall be the 120th day  following  the
Closing  Date,  and (ii) the fifth  Trading Day  following the date on which the
Company is notified by the Commission  that the initial  Registration  Statement
will not be reviewed or is no longer subject to further review and comments, and
(b) with respect to any additional  Registration Statements that may be required
pursuant to Section 2(b), the earlier of: (i) the 90th day following the date on
which the Company  first  knows,  or  reasonably  should  have known,  that such
additional  Registration  Statement is required  under such  Section;  provided,
that,  if the  Commission  reviews  and  has  written  comments  to  such  filed
Registration  Statement  that  would  require  the  filing  of  a  pre-effective
amendment thereto with the Commission,  then the  Effectiveness  Date under this
clause  (b)(i) shall be the 120th day  following the date that the Company first
knows,  or  reasonably  should have  known,  that such  additional  Registration
Statement  is  required  under  such  Section  and (ii) the  fifth  Trading  Day
following the date on which the Company is notified by the Commission  that such
additional  Registration  Statement will not be reviewed or is no longer subject
to further review and comments.

            "EFFECTIVENESS  PERIOD"  shall have the meaning set forth in Section
2(a).

            "EXCHANGE  ACT"  means  the  Securities  Exchange  Act of  1934,  as
amended.

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            "FILING  DATE" means (a) with  respect to the  initial  Registration
Statement  required to be filed under Section  2(a),  the 30th day following the
Closing Date,  and (b) with respect to any  additional  Registration  Statements
that may be required  pursuant to Section 2(b),  the 30th day following the date
on which the Company  first knows,  or reasonably  should have known,  that such
additional Registration Statement is required under such Section.

            "HOLDER" or "HOLDERS"  means the holder or holders,  as the case may
be, from time to time of Registrable Securities.

            "INDEMNIFIED  PARTY"  shall  have the  meaning  set forth in Section
5(c).

            "INDEMNIFYING  PARTY"  shall have the  meaning  set forth in Section
5(c).

            "LOSSES" shall have the meaning set forth in Section 5(a).

            "PROCEEDING"  means  an  action,   claim,  suit,   investigation  or
proceeding   (including,   without  limitation,   an  investigation  or  partial
proceeding, such as a deposition), whether commenced or threatened.

            "PROSPECTUS"  means  the  prospectus   included  in  a  Registration
Statement  (including,  without  limitation,  a  prospectus  that  includes  any
information  previously  omitted from a prospectus filed as part of an effective
registration  statement  in  reliance  upon  Rule  430A  promulgated  under  the
Securities Act), as amended or supplemented by any prospectus  supplement,  with
respect  to  the  terms  of  the  offering  of any  portion  of the  Registrable
Securities covered by the Registration  Statement,  and all other amendments and
supplements to the  Prospectus,  including  post-effective  amendments,  and all
material  incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

            "REGISTRABLE SECURITIES" means the Warrant Shares and the Underlying
Shares,  together with any  securities  issued or issuable upon any stock split,
dividend  or other  distribution,  recapitalization  or  similar  event,  or any
conversion  price  adjustment  with respect to any of the securities  referenced
above.

            "REGISTRATION  STATEMENT" means the initial  registration  statement
required  to be  filed  in  accordance  with  Section  2(a)  and any  additional
registration statement(s) required to be filed under Section 2(b), including (in
each case) the  Prospectus,  amendments  and  supplements  to such  registration
statements or Prospectus,  including  pre- and  post-effective  amendments,  all
exhibits  thereto,  and all material  incorporated  by reference or deemed to be
incorporated by reference in such registration statements.

            "RULE 144" means Rule 144 promulgated by the Commission  pursuant to
the  Securities  Act,  as such Rule may be  amended  from  time to time,  or any
similar  rule  or  regulation   hereafter   adopted  by  the  Commission  having
substantially the same effect as such Rule.

            "RULE 415" means Rule 415 promulgated by the Commission  pursuant to
the  Securities  Act,  as such Rule may be  amended  from  time to time,  or any
similar  rule  or  regulation   hereafter   adopted  by  the  Commission  having
substantially the same effect as such Rule.

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            "RULE 424" means Rule 424 promulgated by the Commission  pursuant to
the  Securities  Act,  as such Rule may be  amended  from  time to time,  or any
similar  rule  or  regulation   hereafter   adopted  by  the  Commission  having
substantially the same effect as such Rule.

            "SECURITIES ACT" means the Securities Act of 1933, as amended.

            "SHARES" means the shares of 5% Series A Convertible Preferred Stock
issued or issuable to the Investors pursuant to the Purchase Agreement.

            "UNDERLYING  SHARES" means the shares of Common Stock  issuable upon
conversion of the Shares and Dividend Shares.

            "WARRANTS"  means  the  Common  Stock  purchase  warrants  issued or
issuable  to  the  Investors  pursuant  to  the  Purchase  Agreement  and to any
placement  agent  identified  in Schedule  3.1(u) to the  Purchase  Agreement in
accordance  with the terms of the engagement or similar  agreements  between the
Company and any such agents.

            "WARRANT  SHARES"  means the shares of Common  Stock  issuable  upon
exercise of the Warrants.

      2. Registration.

            (a) On or prior to each Filing Date,  the Company  shall prepare and
file with the  Commission a  Registration  Statement  covering the resale of all
Registrable  Securities  not  already  covered  by  an  existing  and  effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415, on Form S-3 (except if the Company is not then eligible to register
for  resale  the  Registrable  Securities  on  Form  S-3,  in  which  case  such
registration  shall  be on  another  appropriate  form for  such  purpose).  The
Registration  Statement shall contain (except if otherwise  required pursuant to
written comments received from the Commission upon a review of such Registration
Statement) the "Plan of  Distribution"  attached  hereto as Annex A. The Company
shall  cause the  Registration  Statement  to be  declared  effective  under the
Securities  Act as soon as  possible  but,  in any  event,  no  later  than  the
Effectiveness  Date,  and shall use its  reasonable  best  efforts  to keep each
Registration Statement continuously effective under the Securities Act until the
date  which  is the  earlier  of  (i) at  such  time  as all of the  Registrable
Securities  thereunder  have been publicly sold by the Holders,  or (ii) at such
time as all of the  Registrable  Securities  thereunder  may be sold pursuant to
Rule 144(k) as determined  by the Company and evidenced by a written  opinion of
its  counsel  to that  effect  delivered  to each of the  Holders  who then hold
Registrable   Securities  that  have  not  been  publicly  sold,  addressed  and
acceptable  to the  Company's  transfer  agent  and the  affected  Holders  (the
"EFFECTIVENESS  PERIOD").  Promptly  following  any  date on which  the  Company
becomes  eligible to use a  registration  statement  on Form S-3 to register the
Registrable  Securities  for  resale,  without  accelerating  the  filing of the
Company's  financial  statements,  but in no event more than ten days after such
date, the Company shall file a  registration  statement on Form S-3 covering the
Registrable  Securities (or a  post-effective  amendment on Form S-3 to the then
effective  Registration  Statement)  and shall  cause  such  Shelf  Registration
Statement to be declared  effective as soon as possible  thereafter,  but in any
event  prior  to the  Effectiveness  Date  therefor.  The  initial  Registration
Statement shall include a number of Registrable  Securities  equal to the sum of

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(a) the number of Underlying  Share issuable upon an assumed  conversion in full
of the Shares (assuming for such purpose that the Conversion Price is 90% of the
conversion  price on the Closing Date,  the Shares are held until for the entire
Effectiveness  Period and all dividends  accrete to Stated  Value),  and (b) the
number of  Warrant  Shares  issuable  upon a  exercise  in full of the  Warrants
(assuming for such purpose that the exercise price of the Warrants is 90% of the
exercise price on the Closing  Date),  as such sum may be required to be reduced
pursuant to written  comments to the  Registration  Statement  received from the
Commission.

            (b) If for any  reason  the  Commission  does not  permit all of the
Registrable  Securities  to be  included  in the  Registration  Statement  filed
pursuant to Section 2(a), or for any reason any  Registrable  Securities are not
then  covered by an effective  Registration  Statement,  then the Company  shall
prepare  and  file by the  Filing  Date  for  such  Registration  Statement,  an
additional  Registration  Statement  covering  the  resale  of  all  Registrable
Securities  not  already  covered  by an  existing  and  effective  Registration
Statement for an offering to be made on a continuous basis pursuant to Rule 415,
on Form S-3 (except if the Company is not then  eligible to register  for resale
the Registrable Securities on Form S-3, in which case such registration shall be
on another appropriate form for such purpose).  Each such Registration Statement
shall  contain  (except if  otherwise  required  pursuant  to  written  comments
received from the Commission upon a review of such  Registration  Statement) the
"Plan of Distribution"  attached hereto as Annex A. The Company shall cause each
such Registration Statement to be declared effective under the Securities Act as
soon as possible but, in any event, by its Effectiveness Date, and shall use its
reasonable  best  efforts  to  keep  such  Registration  Statement  continuously
effective  under the  Securities  Act during the  entire  Effectiveness  Period.
Promptly  following  any date on which the  Company  becomes  eligible  to use a
registration  statement on Form S-3 to register the  Registrable  Securities for
resale,  without accelerating the filing of the Company's financial  statements,
but in no event more than ten days after such  date,  the  Company  shall file a
registration  statement on Form S-3 covering the  Registrable  Securities  (or a
post-effective  amendment  on  Form  S-3  to  the  then  effective  Registration
Statement)  and shall  cause such Shelf  Registration  Statement  to be declared
effective  as  soon  as  possible  thereafter,  but in any  event  prior  to the
Effectiveness Date therefor.

            (c) If: (i) a Registration Statement is not filed on or prior to its
Filing Date (if the Company files a Registration Statement without affording the
Holders the opportunity to review and comment on the same as required by Section
3(a) hereof, the Company shall not be deemed to have satisfied this clause (i)),
or (ii) a Registration  Statement is not declared effective by the Commission on
or prior to its required  Effectiveness Date, or (iii) after its Effective Date,
without regard for the reason thereunder or efforts therefore, such Registration
Statement  ceases for any reason to be effective and available to the Holders as
to all Registrable Securities to which it is required to cover at any time prior
to the expiration of its  Effectiveness  Period for more than an aggregate of 20
Trading Days (which need not be consecutive),  or (iv) the Company shall fail to
issue and deliver  Underlying  Shares or Warrant  Shares (as  applicable) by the
10th day following the date on which such  securities  are required to have been
issued and delivered  following  conversion or exercise (as  applicable)  of the
Shares or Warrants (any such failure or breach being  referred to as an "EVENT,"
and for purposes of clauses (i) or (ii) the date on which such Event occurs,  or
for  purposes  of clause  (iii) the date  which such 20  Trading  Day-period  is
exceeded,  or for purposes of clause (iv) the date which such 10  day-period  is
exceeded  being  referred to as "EVENT  DATE"),  then,  in addition to any other

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rights  available  to the  Holders  under  the  Transaction  Documents  or under
applicable  law,:  (x) on each such  Event  Date the  Company  shall pay to each
Holder an amount in cash,  as partial  liquidated  damages and not as a penalty,
equal to 1% of the aggregate  Investment  Amount of such Holder  pursuant to the
Purchase Agreement to acquire Shares (it being agreed that no liquidated damages
will be incurred hereunder for Events pertaining to Warrant Shares);  and (y) on
each  monthly  anniversary  of each such Event Date  thereof (if the  applicable
Event  shall not have been cured by such  date)  until the  applicable  Event is
cured,  the  Company  shall pay to each  Holder an  amount in cash,  as  partial
liquidated  damages  and  not as a  penalty,  equal  to  1.5%  of the  aggregate
Investment  Amount  paid by such  Holder  pursuant  to the  Purchase  Agreement;
provided,  that no Investor  shall be  entitled to receive  more than 15% of its
Investment  Amount as partial  liquidated  damages  under this  Section.  If the
Company fails to pay any partial  liquidated damages pursuant to this Section in
full  within ten days after the date  payable,  the  Company  will pay  interest
thereon  at a rate of 10% per  annum  (or such  lesser  maximum  amount  that is
permitted to be paid by applicable  law) to the Holder,  accruing daily from the
date such partial liquidated  damages are due until such amounts,  plus all such
interest thereon,  are paid in full. The partial  liquidated damages pursuant to
the terms  hereof  shall  apply on a daily  pro-rata  basis for any portion of a
month prior to the cure of an Event, except in the case of the first Event Date.

            (d) Each  Holder  agrees  to  furnish  to the  Company  a  completed
Questionnaire  in the form  attached  to this  Agreement  as Annex B (a "SELLING
HOLDER  QUESTIONNAIRE").  The  Company  shall not be  required  to  include  the
Registrable  Securities of a Holder in a Registration Statement and shall not be
required to pay any  liquidated  or other  damages  under Section 2(c) hereof to
such Holder who fails to furnish to the Company a fully completed Selling Holder
Questionnaire  at least two Trading Day prior to the Filing Date (subject to the
requirements set forth in Section 3(a)).

      3. Registration Procedures

            In connection with the Company's registration obligations hereunder,
the Company and, as applicable, Holders shall do the following:

            (a) Not  less  than  five  Trading  Days  prior to the  filing  of a
Registration  Statement or any related Prospectus or any amendment or supplement
thereto,  the  Company  shall  furnish to each  Holder or to legal  counsel of a
Holder  (if  requested  by such  Holder)  copies of the  "Selling  Stockholders"
section  of such  document,  the  "Plan of  Distribution"  and any  risk  factor
contained in such document that addresses  specifically  this transaction or the
Selling Stockholders (such portions of the Registration Statement,  the "SELLING
HOLDER  SECTIONS"),  as proposed to be filed which  documents will be subject to
the review of such Holders or their legal counsel,  as  applicable.  The Company
shall not file a Registration Statement or any such Prospectus or any amendments
or  supplements  thereto that does not contain the  disclosure  containing  such
Holder as a "Selling  Stockholder"  as provided to the Company by such Holder in
connection therewith.

            (b) (i) The Company shall prepare and file with the Commission  such
amendments,  including post-effective amendments, to each Registration Statement
and the Prospectus used in connection therewith as may be necessary to keep such

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Registration  Statement  continuously effective as to the applicable Registrable
Securities for its Effectiveness Period and prepare and file with the Commission
such  additional  Registration  Statements in order to register for resale under
the Securities  Act all of the  Registrable  Securities;  (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus  supplement,
and as so  supplemented  or  amended  to be filed  pursuant  to Rule 424;  (iii)
respond as promptly as  reasonably  possible to any comments  received  from the
Commission with respect to each Registration  Statement or any amendment thereto
and, as promptly as  reasonably  possible  provide the Holders true and complete
copies of all correspondence  from and to the Commission relating to the Selling
Holder  Sections  (other  than to the  extent  the  Company  believes  that such
disclosure  would  result in the  disclosure  to the  Holders  of  material  and
non-public  information concerning the Company); and (iv) comply in all material
respects  with the  provisions of the  Securities  Act and the Exchange Act with
respect to the  Registration  Statements and the  disposition of all Registrable
Securities covered by each Registration Statement.

            (c) The Company  shall notify the Holders as promptly as  reasonably
possible  (and,  in the case of (i)(A)  below,  not less than three Trading Days
prior to such filing) and (if requested by any such Person)  confirm such notice
in  writing no later  than one  Trading  Day  following  the day  (i)(A)  when a
Prospectus  or  any  Prospectus  supplement  or  post-effective  amendment  to a
Registration Statement is proposed to be filed; (B) when the Commission notifies
the Company whether there will be a "review" of such Registration  Statement and
whenever the Commission comments in writing on such Registration  Statement (the
Company shall provide true and complete copies of all correspondence to and from
the Commission regarding the Registration  Statement to each of the Holders that
pertain to the Selling Holder Sections applicable to such Holder,  other than to
the  extent  the  Company  believes  that such  disclosure  would  result in the
disclosure to the Holders of material and non-public  information concerning the
Company;   and  (C)  with  respect  to  each   Registration   Statement  or  any
post-effective  amendment,  when  the  same has  become  effective;  (ii) of any
request by the Commission or any other Federal or state  governmental  authority
for amendments or  supplements to a Registration  Statement or Prospectus or for
additional  information;  (iii) of the  issuance by the  Commission  of any stop
order suspending the effectiveness of a Registration  Statement  covering any or
all of the Registrable  Securities or the initiation of any Proceedings for that
purpose;  (iv) of the receipt by the Company of any notification with respect to
the suspension of the  qualification  or exemption from  qualification of any of
the Registrable  Securities for sale in any  jurisdiction,  or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of any
event or passage  of time that  makes the  financial  statements  included  in a
Registration Statement ineligible for inclusion therein or any statement made in
such Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated  therein by reference  untrue in any material respect or that
requires  any  revisions to such  Registration  Statement,  Prospectus  or other
documents so that, in the case of such Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue  statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

            (d) The Company  will use its  reasonable  best efforts to avoid the
issuance of, or, if issued,  obtain the  withdrawal of (i) any order  suspending

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the  effectiveness  of a Registration  Statement,  or (ii) any suspension of the
qualification  (or  exemption  from  qualification)  of any  of the  Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.

            (e) Upon request by a Holder,  the Company will promptly  deliver to
such Holder,  without charge,  as many copies of each Prospectus or Prospectuses
(including each form of prospectus) and each amendment or supplement  thereto as
such Persons may reasonably  request.  The Company hereby consents to the use of
such Prospectus and each amendment or supplement  thereto by each of the selling
Holders in connection with the offering and sale of the  Registrable  Securities
covered by such Prospectus and any amendment or supplement thereto.

            (f) Prior to any public  offering  of  Registrable  Securities,  the
Company will use its reasonable best efforts to register or qualify or cooperate
with the selling  Holders in connection with the  registration or  qualification
(or exemption  from such  registration  or  qualification)  of such  Registrable
Securities  for offer and sale  under the  securities  or Blue Sky laws that are
required for the Holders to offer and sell the  Registrable  Securities  and are
requested  by the  Holders  in  writing,  to  keep  each  such  registration  or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things  necessary or advisable to enable the
disposition in such  jurisdictions of the Registrable  Securities covered by the
Registration Statements; provided, however, that in no event will the Company be
required  to  satisfy  its  obligation  under  this  paragraph  to qualify to do
business generally in any jurisdiction where it is not so qualified.

            (g) The Company will  cooperate  with the Holders to facilitate  the
timely  preparation  and  delivery  of  certificates   representing  Registrable
Securities  to  be  delivered  to a  transferee  pursuant  to  the  Registration
Statements,  which  certificates  shall be free, to the extent  permitted by the
Purchase Agreement,  of all restrictive  legends, and to enable such Registrable
Securities to be in such  denominations and registered in such names as any such
Holders may request.

            (h) The Company shall, upon the occurrence of any event contemplated
by Section 3(c)(v), as promptly as reasonably possible,  prepare a supplement or
amendment,  including a post-effective  amendment,  to the affected Registration
Statements  or  a  supplement   to  the  related   Prospectus  or  any  document
incorporated  or deemed to be  incorporated  therein by reference,  and file any
other  required  document so that,  as  thereafter  delivered,  no  Registration
Statement nor any Prospectus will contain an untrue statement of a material fact
or omit to state a material fact  required to be stated  therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

      4.  Registration   Expenses.   All  fees  and  expenses  incident  to  the
performance  of or compliance  with this Agreement by the Company shall be borne
by the Company whether or not any Registrable  Securities are sold pursuant to a
Registration  Statement.  The fees and  expenses  referred  to in the  foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including,  without  limitation,  fees and expenses (A) with respect to filings
required  to be made with any Trading  Market on which the Common  Stock is then
listed for trading,  and (B) in compliance with applicable  state  securities or
Blue Sky laws), (ii) printing expenses (including, without limitation,  expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the  printing of  prospectuses  is  reasonably  requested by the holders of a

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majority of the Registrable Securities included in the Registration  Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel  for the  Company  and  $5,000  of fees of the Lead  Investor's  counsel
incurred in connection with its review of the Registration Statements hereunder,
(v)  Securities  Act  liability  insurance,  if  the  Company  so  desires  such
insurance,  and (vi) fees and  expenses  of all other  Persons  retained  by the
Company in connection with the consummation of the transactions  contemplated by
this  Agreement.  In addition,  the Company shall be responsible  for all of its
internal   expenses   incurred  in  connection  with  the  consummation  of  the
transactions contemplated by this Agreement (including,  without limitation, all
salaries  and  expenses  of its  officers  and  employees  performing  legal  or
accounting  duties),  the expense of any annual  audit and the fees and expenses
incurred in  connection  with the listing of the  Registrable  Securities on any
securities exchange as required hereunder.

      5. Indemnification.

            (a)   Indemnification   by   the   Company.   The   Company   shall,
notwithstanding  any termination of this Agreement,  indemnify and hold harmless
each Holder, the officers,  directors,  agents,  investment advisors,  partners,
members and employees of each of them,  each Person who controls any such Holder
(within  the  meaning of Section 15 of the  Securities  Act or Section 20 of the
Exchange  Act) and the  officers,  directors,  agents and employees of each such
controlling  Person, to the fullest extent permitted by applicable law, from and
against any and all losses,  claims,  damages,  liabilities,  costs  (including,
without  limitation,  reasonable costs of preparation and reasonable  attorneys'
fees) and expenses  (collectively,  "LOSSES"),  as  incurred,  arising out of or
relating to any untrue or alleged untrue  statement of a material fact contained
in any  Registration  Statement,  any Prospectus or any form of prospectus or in
any amendment or supplement thereto or in any preliminary prospectus, or arising
out of or  relating  to any  omission  or alleged  omission  of a material  fact
required to be stated  therein or necessary to make the  statements  therein (in
the case of any Prospectus or form of prospectus or supplement thereto, in light
of the circumstances  under which they were made) not misleading,  except to the
extent, but only to the extent, that (1) such untrue statements or omissions are
based solely upon information  regarding such Holder furnished in writing to the
Company by such Holder  expressly  for use  therein,  or to the extent that such
information  relates  to  such  Holder  or  such  Holder's  proposed  method  of
distribution of Registrable Securities and was expressly approved by such Holder
for use in the  Registration  Statement (it being understood that the Holder has
approved Annex A hereto for this purpose) or (2) in the case of an occurrence of
an event of the type specified in Section  3(c)(ii)-(v),  the use by such Holder
of an outdated or  defective  Prospectus  after the  Company has  notified  such
Holder in writing that the  Prospectus is outdated or defective and prior to the
receipt by such  Holder of an Advice or an amended or  supplemented  Prospectus,
but only if and to the extent  that  following  the receipt of the Advice or the
amended or supplemented  Prospectus the  misstatement or omission giving rise to
such Loss  would have been  corrected.  The  Company  shall  notify the  Holders
promptly of the institution,  threat or assertion of any Proceeding of which the
Company  is  aware in  connection  with the  transactions  contemplated  by this
Agreement.

            (b) Indemnification by Holders. Each Holder shall, severally and not
jointly,  indemnify  and hold  harmless the Company,  its  directors,  officers,
agents and employees,  each Person who controls the Company  (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors,  officers,  agents or employees of such controlling  Persons,  to the

                                       8
<PAGE>

fullest  extent  permitted by applicable  law,  from and against all Losses,  as
incurred,  arising solely out of or based solely upon: (x) such Holder's failure
to comply with the prospectus delivery requirements of the Securities Act or (y)
any untrue statement of a material fact contained in any Registration Statement,
any  Prospectus,  or any form of  prospectus,  or in any amendment or supplement
thereto,  or  arising  solely  out of or based  solely  upon any  omission  of a
material fact required to be stated  therein or necessary to make the statements
therein not  misleading  to the extent,  but only to the extent  that,  (1) such
untrue statements or omissions are based solely upon information  regarding such
Holder  furnished  in writing to the  Company by such Holder  expressly  for use
therein,  or to the extent that such information  relates to such Holder or such
Holder's  proposed  method of  distribution  of  Registrable  Securities and was
expressly  approved by such  Holder for use in the  Registration  Statement  (it
being  understood that the Holder has approved Annex A hereto for this purpose),
such  Prospectus  or such form of  Prospectus  or in any amendment or supplement
thereto or (2) in the case of an occurrence of an event of the type specified in
Section  3(c)(ii)-(v),  the use by  such  Holder  of an  outdated  or  defective
Prospectus  after the  Company  has  notified  such  Holder in writing  that the
Prospectus  is outdated or defective  and prior to the receipt by such Holder of
an Advice  or an  amended  or  supplemented  Prospectus,  but only if and to the
extent that  following the receipt of the Advice or the amended or  supplemented
Prospectus the misstatement or omission giving rise to such Loss would have been
corrected.  In no event shall the liability of any selling  Holder  hereunder be
greater in amount than the dollar  amount of the net  proceeds  received by such
Holder  upon  the  sale  of the  Registrable  Securities  giving  rise  to  such
indemnification obligation.

            (c) Conduct of Indemnification  Proceedings. If any Proceeding shall
be brought or asserted  against any Person  entitled to indemnity  hereunder (an
"INDEMNIFIED  PARTY"),  such Indemnified  Party shall promptly notify the Person
from whom  indemnity is sought (the  "INDEMNIFYING  PARTY") in writing,  and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably  satisfactory to the Indemnified Party and the payment of all
fees and expenses  incurred in connection with defense thereof;  provided,  that
the failure of any  Indemnified  Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally  determined  by a court
of  competent  jurisdiction  (which  determination  is not  subject to appeal or
further  review)  that  such  failure  shall  have  proximately  and  materially
adversely prejudiced the Indemnifying Party.

            An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense  thereof,  but the fees
and expenses of such counsel shall be at the expense of such  Indemnified  Party
or Parties unless:  (1) the Indemnifying Party has agreed in writing to pay such
fees and  expenses;  (2) the  Indemnifying  Party shall have failed  promptly to
assume  the  defense  of  such  Proceeding  and  to  employ  counsel  reasonably
satisfactory to such Indemnified Party in any such Proceeding;  or (3) the named
parties to any such Proceeding  (including any impleaded  parties)  include both
such Indemnified  Party and the Indemnifying  Party, and such Indemnified  Party
shall have been  advised by counsel  that a conflict  of  interest  is likely to
exist if the same  counsel  were to  represent  such  Indemnified  Party and the
Indemnifying  Party (in which  case,  if such  Indemnified  Party  notifies  the
Indemnifying  Party in writing that it elects to employ separate  counsel at the
expense of the Indemnifying  Party,  the  Indemnifying  Party shall not have the
right to assume the defense  thereof and such counsel shall be at the expense of

                                       9
<PAGE>

the  Indemnifying  Party).  The  Indemnifying  Party shall not be liable for any
settlement of any such Proceeding  effected without its written  consent,  which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party,  unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.

            All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent  incurred in connection  with  investigating  or
preparing  to defend  such  Proceeding  in a manner not  inconsistent  with this
Section) shall be paid to the Indemnified Party, as incurred, within ten Trading
Days of written notice thereof to the Indemnifying  Party (regardless of whether
it is  ultimately  determined  that an  Indemnified  Party  is not  entitled  to
indemnification  hereunder;  provided,  that the Indemnifying  Party may require
such  Indemnified  Party to undertake to reimburse all such fees and expenses to
the extent it is finally  judicially  determined that such Indemnified  Party is
not entitled to indemnification hereunder).

            (d) Contribution.  If a claim for indemnification under Section 5(a)
or 5(b) is unavailable  to an  Indemnified  Party (by reason of public policy or
otherwise),   then  each  Indemnifying  Party,  in  lieu  of  indemnifying  such
Indemnified  Party,  shall  contribute  to the  amount  paid or  payable by such
Indemnified  Party  as a  result  of  such  Losses,  in  such  proportion  as is
appropriate  to  reflect  the  relative  fault  of the  Indemnifying  Party  and
Indemnified  Party in connection with the actions,  statements or omissions that
resulted in such Losses as well as any other relevant equitable  considerations.
The relative fault of such  Indemnifying  Party and  Indemnified  Party shall be
determined by reference to, among other things,  whether any action in question,
including any untrue or alleged untrue  statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information  supplied by, such Indemnifying  Party or Indemnified Party, and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent  such  action,  statement  or  omission.  The amount  paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable  fees or  expenses  incurred  by such  party in  connection  with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the  indemnification  provided for in this Section was  available to
such party in accordance with its terms.

            The parties  hereto agree that it would not be just and equitable if
contribution  pursuant  to  this  Section  5(d)  were  determined  by  pro  rata
allocation or by any other method of allocation  that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds  actually  received  by such  Holder  from the sale of the  Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has  otherwise  been  required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.

            The indemnity and contribution  agreements contained in this Section
are in addition to any liability that the  Indemnifying  Parties may have to the
Indemnified Parties.

                                       10
<PAGE>

      6. Miscellaneous

            (a)  Remedies.  In the  event of a  breach  by the  Company  or by a
Holder,  of any of their  obligations  under this Agreement,  each Holder or the
Company,  as the case may be, in  addition to being  entitled  to  exercise  all
rights granted by law and under this Agreement,  including  recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary  damages would not provide  adequate
compensation  for any losses  incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific  performance  in respect of such breach,  it shall waive the
defense that a remedy at law would be adequate.

            (b) No  Piggyback  on  Registrations.  Except  as and to the  extent
specified in Schedule 3.1(v) to the Purchase Agreement,  neither the Company nor
any of its security  holders  (other than the Holders in such capacity  pursuant
hereto) may include securities of the Company in a Registration  Statement other
than  the  Registrable  Securities,   and  the  Company  shall  not  during  the
Registration  Period enter into any agreement providing any such right to any of
its security holders.

            (c) Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it  in  connection  with  sales  of  Registrable   Securities  pursuant  to  the
Registration Statement.

            (d) Discontinued Disposition.  Each Holder agrees by its acquisition
of such  Registrable  Securities that, upon receipt of a notice from the Company
of the  occurrence  of any event of the kind  described  in Section  3(c),  such
Holder will forthwith  discontinue  disposition of such  Registrable  Securities
under the  Registration  Statement until such Holder's  receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the  "ADVICE") by the Company that the use of the applicable
Prospectus  may be resumed,  and, in either  case,  has  received  copies of any
additional  or  supplemental  filings  that are  incorporated  or  deemed  to be
incorporated  by reference in such  Prospectus or  Registration  Statement.  The
Company may provide  appropriate  stop orders to enforce the  provisions of this
paragraph.

            (e)   Piggy-Back   Registrations.   If  at  any  time   during   the
Effectiveness Period there is not an effective  Registration  Statement covering
all of the Registrable Securities and the Company shall determine to prepare and
file with the  Commission a registration  statement  relating to an offering for
its own account or the account of others under the  Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents  relating to equity  securities to
be issued solely in connection with any acquisition of any entity or business or
equity  securities  issuable in connection  with stock option or other  employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen days after receipt of such notice, any such
Holder  shall  so  request  in  writing,  the  Company  shall  include  in  such
registration  statement  all or any  part of such  Registrable  Securities  such
holder  requests to be registered,  subject to customary  underwriter  cutbacks,
including a cutback to zero, applicable to all holders of registration rights.

                                       11
<PAGE>

            (f)  Amendments  and  Waivers.  The  provisions  of this  Agreement,
including  the  provisions  of this  sentence,  may not be amended,  modified or
supplemented,  and waivers or consents to departures from the provisions  hereof
may not be given,  unless the same shall be in writing and signed by the Company
and the Holders of no less than a majority of the then  outstanding  or issuable
Registrable  Securities.  Notwithstanding the foregoing,  a waiver or consent to
depart  from  the  provisions  hereof  with  respect  to a matter  that  relates
exclusively  to the  rights of certain  Holders  and that does not  directly  or
indirectly  affect  the  rights of other  Holders  may be given by Holders of at
least a majority of the  Registrable  Securities to which such waiver or consent
relates,  provided,  that the  provisions  of this  sentence may not be amended,
modified,  or  supplemented  except in  accordance  with the  provisions  of the
immediately preceding sentence.

            (g)  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  Trading  Day,  (ii) the  Trading  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 Trading  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:    TNX TELEVISION HOLDINGS, INC.
                             666 Third Avenue
                             New York, NY 10017
                             Attn: President
                             Facsimile: (215) 972-8183

       With a copy to:       Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
                             666 Third Avenue
                             New York, NY 10017
                             Attention:  Kenneth R. Koch, Esq.
                             Facsimile: (212) 983-3115

       If to an Investor:    To the address for notices to such Investor under
                             the Purchase Agreement.

       If to any other Person who is then the registered Holder:

                             To the  address of such Holder as it appears
                             in the stock transfer books of the Company

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

                                       12
<PAGE>

            (h)  Successors  and  Assigns.  This  Agreement  shall  inure to the
benefit of and be binding upon the successors  and permitted  assigns of each of
the parties and shall inure to the benefit of each  Holder.  The Company may not
assign its rights or obligations  hereunder without the prior written consent of
each Holder.  Each Holder may assign their  respective  rights  hereunder in the
manner and to the Persons as permitted under the Purchase Agreement.

            (i) Execution and  Counterparts.  This  Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and, all of which taken together  shall  constitute one and the same
Agreement.   In  the  event  that  any   signature  is  delivered  by  facsimile
transmission,  such  signature  shall create a valid  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  were the  original
thereof.

            (j)  Governing  Law.  All  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 (except with respect to matters  governed by corporate law in the State
of Delaware), without regard to the principles of conflicts of law thereof. Each
party agrees that all Proceedings  concerning the  interpretations,  enforcement
and defense of the transactions  contemplated by this Agreement (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"). 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  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.  Each party
hereto hereby irrevocably  waives, to the fullest extent permitted by applicable
law,  any and all  right to trial by jury in any  Proceeding  arising  out of or
relating to this Agreement or the transactions  contemplated  hereby.  If either
party shall commence a Proceeding to enforce any  provisions of this  Agreement,
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.

            (k) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.

            (l) Severability. If any term, provision, covenant or restriction of
this  Agreement  is held by a court of  competent  jurisdiction  to be  invalid,
illegal,  void  or  unenforceable,  the  remainder  of  the  terms,  provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto  shall use their  reasonable  efforts to find and  employ an  alternative
means to achieve the same or substantially  the same result as that contemplated

                                       13
<PAGE>

by such term,  provision,  covenant or restriction.  It is hereby stipulated and
declared to be the  intention of the parties  that they would have  executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

            (m) Headings.  The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

            (n) Independent  Nature of Investors'  Obligations  and Rights.  The
obligations of each Investor under this Agreement are several and not joint with
the obligations of any other  Investor,  and no Investor shall be responsible in
any way for the  performance of the obligations of any other Investor under this
Agreement.  Nothing  contained  herein or in any  Transaction  Document,  and no
action taken by any Investor pursuant thereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other kind of
entity,  or create a  presumption  that the  Investors  are in any way acting in
concert  or as a group  with  respect to such  obligations  or the  transactions
contemplated by this Agreement or any other Transaction Document.  Each Investor
acknowledges  that no other Investor will be acting as agent of such Investor in
enforcing its rights under this  Agreement.  Each Investor  shall be entitled to
independently  protect and enforce its rights,  including without limitation the
rights  arising out of this  Agreement,  and it shall not be  necessary  for any
other  Investor to be joined as an additional  party in any  Proceeding for such
purpose.  The Company  acknowledges that each of the Investors has been provided
with the same  Registration  Rights  Agreement  for the  purpose  of  closing  a
transaction with multiple Investors and not because it was required or requested
to do so by any Investor.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                           SIGNATURE PAGES TO FOLLOW]

                                       14
<PAGE>

      IN WITNESS  WHEREOF,  the parties have executed this  Registration  Rights
Agreement as of the date first written above.

                          TNX TELEVISION HOLDINGS, INC.

                                            By:_________________________________
                                                 Name:
                                                 Title:

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES OF INVESTOR TO FOLLOW]

<PAGE>

      IN WITNESS  WHEREOF,  the parties have executed this  Registration  Rights
Agreement as of the date first written above.

                                      NAME OF INVESTING ENTITY

                                      By:
                                           -------------------------------------
                                          Name:
                                          Title:

                                      ADDRESS FOR NOTICE

                                      c/o:
                                           -------------------------------------

                                      Street:
                                              ----------------------------------

                                      City/State/Zip:
                                                      --------------------------

                                      Attention:
                                                 -------------------------------

                                      Tel:
                                               ---------------------------------

                                      Fax:
                                               ---------------------------------

                                      Email:
                                               ---------------------------------

<PAGE>

                                                                         Annex A

                              Plan of Distribution

      The Selling Stockholders and any of their pledgees,  donees,  transferees,
assignees and successors-in-interest  may, from time to time, sell any or all of
their shares of Common Stock on any stock exchange,  market or trading  facility
on which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. The Selling  Stockholders may use any one or more of
the following methods when selling shares:

o     ordinary   brokerage   transactions   and   transactions   in  which   the
      broker-dealer solicits Investors;

o     block trades in which the broker-dealer will attempt to sell the shares as
      agent but may  position  and resell a portion of the block as principal to
      facilitate the transaction;

o     purchases by a broker-dealer as principal and resale by the  broker-dealer
      for its account;

o     an exchange  distribution  in accordance  with the rules of the applicable
      exchange;

o     privately negotiated transactions;

o     to cover short sales made after the date that this Registration  Statement
      is declared effective by the Commission;

o     broker-dealers may agree with the Selling Stockholders to sell a specified
      number of such shares at a stipulated price per share;

o     a combination of any such methods of sale; and

o     any other method permitted pursuant to applicable law.

      The Selling  Stockholders  may also sell  shares  under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

      Broker-dealers  engaged by the Selling  Stockholders may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or discounts from the Selling  Stockholders  (or, if any  broker-dealer  acts as
agent  for the  purchaser  of  shares,  from the  purchaser)  in  amounts  to be
negotiated.  The  Selling  Stockholders  do not  expect  these  commissions  and
discounts to exceed what is customary in the types of transactions involved.

      The Selling  Stockholders may from time to time pledge or grant a security
interest in some or all of the Shares  owned by them and, if they default in the
performance of their secured  obligations,  the pledgees or secured  parties may
offer and sell shares of Common  Stock from time to time under this  prospectus,
or  under  an  amendment  to this  prospectus  under  Rule  424(b)(3)  or  other
applicable  provision of the Securities Act of 1933 amending the list of selling

                                       15
<PAGE>

stockholders to include the pledgee,  transferee or other successors in interest
as selling stockholders under this prospectus.

      Upon the Company being notified in writing by a Selling  Stockholder  that
any material arrangement has been entered into with a broker-dealer for the sale
of Common Stock through a block trade, special offering,  exchange  distribution
or secondary  distribution or a purchase by a broker or dealer,  a supplement to
this prospectus  will be filed,  if required,  pursuant to Rule 424(b) under the
Securities Act,  disclosing (i) the name of each such Selling Stockholder and of
the participating  broker-dealer(s),  (ii) the number of shares involved,  (iii)
the  price  at which  such  the  shares  of  Common  Stock  were  sold,  (iv)the
commissions paid or discounts or concessions  allowed to such  broker-dealer(s),
where  applicable,   (v)  that  such   broker-dealer(s)   did  not  conduct  any
investigation  to verify the information set out or incorporated by reference in
this prospectus, and (vi) other facts material to the transaction.  In addition,
upon the Company being notified in writing by a Selling Stockholder that a donee
or pledge  intends to sell more than 500 shares of Common Stock, a supplement to
this  prospectus  will be filed if then required in accordance  with  applicable
securities law.

      The Selling  Stockholders  also may transfer the shares of Common Stock in
other circumstances, in which case the transferees, pledgees or other successors
in  interest  will  be the  selling  beneficial  owners  for  purposes  of  this
prospectus.

      The  Selling  Stockholders  and any  broker-dealers  or  agents  that  are
involved  in selling  the shares may be deemed to be  "underwriters"  within the
meaning of the Securities Act in connection with such sales. In such event,  any
commissions  received  by such  broker-dealers  or agents  and any profit on the
resale  of the  shares  purchased  by  them  may be  deemed  to be  underwriting
commissions  or discounts  under the  Securities  Act.  Discounts,  concessions,
commissions and similar selling expenses,  if any, that can be attributed to the
sale  of  Securities  will  be  paid  by  the  Selling  Stockholder  and/or  the
purchasers.  Each  Selling  Stockholder  has  represented  and  warranted to the
Company that it acquired the securities  subject to this registration  statement
in the ordinary course of such Selling  Stockholder's  business and, at the time
of its purchase of such securities such Selling Stockholder had no agreements or
understandings,  directly or indirectly,  with any person to distribute any such
securities.

      The Company  has  advised  each  Selling  Stockholder  that it may not use
shares registered on this Registration  Statement to cover short sales of Common
Stock  made prior to the date on which this  Registration  Statement  shall have
been declared  effective by the Commission.  If a Selling  Stockholder uses this
prospectus  for any  sale  of the  Common  Stock,  it  will  be  subject  to the
prospectus delivery requirements of the Securities Act. The Selling Stockholders
will be responsible  to comply with the applicable  provisions of the Securities
Act and Exchange  Act,  and the rules and  regulations  thereunder  promulgated,
including,  without  limitation,  Regulation  M, as  applicable  to such Selling
Stockholders  in connection with resales of their  respective  shares under this
Registration Statement.

      The  Company is  required  to pay all fees and  expenses  incident  to the
registration of the shares and certain fees of the Selling Stockholders counsel,
but the Company will not receive any proceeds from the sale of the Common Stock.
The Company has agreed to indemnify  the Selling  Stockholders  against  certain
losses,  claims,  damages  and  liabilities,  including  liabilities  under  the
Securities Act. If the Selling  Stockholders use this prospectus for any sale of
the Common Stock, they will be subject to the prospectus  delivery  requirements
of the Securities Act.

<PAGE>

                                                                         Annex B

                          TNX TELEVISION HOLDINGS, INC.

                      SELLING SECURITYHOLDER QUESTIONNAIRE

The undersigned  beneficial owner of common stock (the "COMMON  STOCK"),  of TNX
TELEVISION HOLDINGS, INC. (the "COMPANY") understands that the Company has filed
or  intends  to  file  with  the   Securities  and  Exchange   Commission   (the
"COMMISSION") a Registration  Statement for the  registration  and resale of the
Registrable Securities,  in accordance with the terms of the Registration Rights
Agreement,  dated as of March ___, 2004 (the "REGISTRATION  RIGHTS  AGREEMENT"),
among the Company and the Investors  named therein.  A copy of the  Registration
Rights  Agreement is available  from the Company upon request at the address set
forth below. All capitalized  terms used and not otherwise  defined herein shall
have the meanings ascribed thereto in the Registration Rights Agreement.

The  undersigned  hereby  provides the following  information to the Company and
represents and warrants that such information is accurate:

                                  QUESTIONNAIRE

1.    NAME.

      (a)   Full Legal Name of Selling Securityholder

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

      (b)   Full Legal Name of Registered  Holder (if not the same as (a) above)
            through  which  Registrable  Securities  Listed  in Item 3 below are
            held:

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

      (c)   Full Legal Name of Natural  Control  Person  (which  means a natural
            person who directly you indirectly alone or with others has power to
            vote or dispose of the securities covered by the questionnaire):

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

2.  ADDRESS FOR NOTICES TO SELLING SECURITYHOLDER:

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

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

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Telephone:
          ----------------------------------------------------------------------
Fax:
          ----------------------------------------------------------------------
Contact Person:
          ----------------------------------------------------------------------

<PAGE>

3.    BENEFICIAL OWNERSHIP OF REGISTRABLE SECURITIES:

      (a)   Type and amount of Registrable Securities beneficially owned:

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

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

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

4.    BROKER-DEALER STATUS:

      (a)   Are you a broker-dealer?

                                    Yes |_|       No |_|

      Note:  If yes, the  Commission's  staff has  indicated  that you should be
             identified as an underwriter in the Registration Statement.

      (b)   Are you an affiliate of a broker-dealer?

                                    Yes |_|       No |_|

      (c)   If you are an affiliate of a broker-dealer,  do you certify that you
            bought  the  Registrable   Securities  in  the  ordinary  course  of
            business,  and  at  the  time  of the  purchase  of the  Registrable
            Securities to be resold,  you had no  agreements or  understandings,
            directly  or   indirectly,   with  any  person  to  distribute   the
            Registrable Securities?

                                    Yes |_|       No |_|

      Note:  If no,  the  Commission's  staff has  indicated  that you should be
             identified as an underwriter in the Registration Statement.

5.    BENEFICIAL  OWNERSHIP  OF OTHER  SECURITIES  OF THE  COMPANY  OWNED BY THE
      SELLING SECURITYHOLDER.

      Except  as set  forth  below in this  Item 5, the  undersigned  is not the
      beneficial or registered owner of any securities of the Company other than
      the Registrable Securities listed above in Item 3.

         (a)  Type and  Amount  of Other  Securities  beneficially  owned by the
Selling Securityholder:

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

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

<PAGE>

6.    RELATIONSHIPS WITH THE COMPANY:

      Except  as  set  forth  below,  neither  the  undersigned  nor  any of its
      affiliates,  officers, directors or principal equity holders (owners of 5%
      of more of the equity securities of the undersigned) has held any position
      or office or has had any other material  relationship with the Company (or
      its predecessors or affiliates) during the past three years.

      State any exceptions here:

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

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

The  undersigned  agrees to promptly  notify the Company of any  inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the Effectiveness Date for the Registration Statement.

By signing below, the undersigned  consents to the disclosure of the information
contained  herein in its answers to Items 1 through 6 and the  inclusion of such
information  in the  Registration  Statement  and the  related  prospectus.  The
undersigned understands that such information will be relied upon by the Company
in connection  with the preparation or amendment of the  Registration  Statement
and the related prospectus.

IN WITNESS  WHEREOF the  undersigned,  by authority duly given,  has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated:                                 Beneficial Owner:
       -----------------------                           -----------------------

                                       By:
                                            ------------------------------------
                                            Name:
                                            Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED  NOTICE AND  QUESTIONNAIRE,  AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

                           Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
                           666 Third Avenue
                           New York, NY 10017
                           Attention: Kenneth R. Koch
                           Facsimile: (212) 983-3115EXHIBIT 10.1

                          SECURITIES PURCHASE AGREEMENT

      This Securities Purchase Agreement (this "AGREEMENT") is dated as of April
23, 2004,  among TNX  Television  Holdings,  Inc., a Delaware  corporation  (the
"COMPANY"), and the investors identified on the signature pages hereto (each, an
"INVESTOR" and collectively, the "INVESTORS").

      WHEREAS,  subject to the terms and  conditions set forth in this Agreement
and pursuant to Section 4(2) of the  Securities  Act (as defined below) and Rule
506  promulgated  thereunder,  the  Company  desires  to issue  and sell to each
Investor, and each Investor, severally and not jointly, desires to purchase from
the Company certain  securities of the Company,  as more fully described in this
Agreement.

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

                                   ARTICLE I.
                                   DEFINITIONS

      1.1  Definitions.  In  addition  to the terms  defined  elsewhere  in this
Agreement,  for all purposes of this  Agreement,  the following terms shall have
the meanings indicated in this Section 1.1:

            "ACTION"  means any  action,  suit,  inquiry,  notice of  violation,
proceeding   (including  any  partial   proceeding  such  as  a  deposition)  or
investigation pending or threatened in writing against or affecting the Company,
any  Subsidiary or any of their  respective  properties  before or by any court,
arbitrator,   governmental  or  administrative   agency,   regulatory  authority
(federal,  state,  county,  local or foreign),  stock market,  stock exchange or
trading facility.

            "AFFILIATE"  means any Person that,  directly or indirectly  through
one or more  intermediaries,  controls or is  controlled  by or is under  common
control with a Person, as such terms are used in and construed under Rule 144.

            "BUSINESS  DAY" means any day other than  Saturday,  Sunday or other
day on which commercial banks in The City of New York are authorized or required
by law to remain closed.

            "CERTIFICATE OF DESIGNATION" shall mean a Certificate of Designation
relating to the Shares to be filed prior to the Closing by the Company  with the
Secretary  of  State  of  the  State  of  Delaware   incorporating  the  rights,
preferences and privileges set forth on Exhibit A hereto.

            "CLOSING"  means the closing of the  purchase and sale of the Shares
and the Warrants pursuant to Article II.

<PAGE>

            "CLOSING DATE" means the Business Day immediately following the date
on which all the conditions set forth in Sections 5.1 and 5.2 are satisfied,  or
such other date as the parties may agree.

            "COMMISSION" means the Securities and Exchange Commission.

            "COMMON  STOCK" means the common  stock of the  Company,  $0.001 par
value per share,  and any securities  into which such common stock may hereafter
be reclassified.

            "COMMON STOCK  EQUIVALENTS"  means any  securities of the Company or
any  Subsidiary  which entitle the holder thereof to acquire Common Stock at any
time, including, without limitation, any debt, preferred stock, rights, options,
warrants  or  other   instrument  that  is  at  any  time  convertible  into  or
exchangeable  or  exercisable  for, or otherwise  entitles the holder thereof to
receive,  Common Stock or other  securities  that entitle the holder to receive,
directly or indirectly, Common Stock.

            "COMPANY  COUNSEL" means Mintz,  Levin,  Cohn,  Ferris,  Glovsky and
Popeo, P.C.

            "COMPANY DELIVERABLES" has the meaning set forth in Section 2.2(a).

            "DISCLOSURE  MATERIALS"  means  the SEC  Reports  and the  Company's
Schedules to this Agreement, collectively.

            "EFFECTIVE  DATE"  means  the date that the  Registration  Statement
required by Section 2(a) of the Registration  Rights Agreement is first declared
effective by the Commission.

            "ESCROW AGENT" means the Escrow Agent under the Escrow Agreement.

            "ESCROW AGREEMENT" means the Escrow Agreement,  dated as of the date
of this Agreement,  among the Company, Roth Capital Partners, LLC and the Escrow
Agent, in the form of Exhibit D hereto.

            "EXCHANGE  ACT"  means  the  Securities  Exchange  Act of  1934,  as
amended.

            "GAAP" means U.S. generally accepted accounting principles.

            "INTELLECTUAL  PROPERTY  RIGHTS" means the ownership or right to use
patents, patent applications, trademarks, trademark applications, service marks,
trade names,  copyrights,  licenses and other similar rights in connection  with
the respective  businesses of the Company and the  Subsidiaries  as described in
the SEC Reports.

            "INVESTMENT  AMOUNT"  means,  with  respect  to each  Investor,  the
Investment Amount indicated on such Investor's signature page to this Agreement.

            "LEAD INVESTOR" means Smithfield Fiduciary LLC.

                                       2
<PAGE>

            "LIEN"  means  any  lien,  charge,   encumbrance,   claim,  security
interest, right of first refusal or other restriction of any kind.

            "LOSSES" means any and all losses, liabilities, obligations, claims,
contingencies, damages, costs or expenses, including all judgments, amounts paid
in  settlements,  court  costs  and  reasonable  attorneys'  fees  and  costs of
investigation.

            "MATERIAL  ADVERSE EFFECT" means any of (a) an adverse effect on the
legality, validity or enforceability of any Transaction Document, (b) a material
and adverse effect on the results of operations,  assets, prospects, business or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as
a whole, or (c) an adverse  impairment to the Company's ability to perform fully
on a timely basis its obligations under any Transaction Document.

            "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.

            "PROCEEDING"  means  an  action,   claim,  suit,   investigation  or
proceeding   (including,   without  limitation,   an  investigation  or  partial
proceeding, such as a deposition), whether commenced or threatened.

            "REGISTRABLE  SECURITIES"  shall have the  meaning  set forth in the
Registration Rights Agreement.

            "REGISTRATION  STATEMENT" means a registration statement meeting the
requirements  set forth in the  Registration  Rights  Agreement and covering the
resale by the Investors of the Underlying Shares and the Warrant Shares.

            "REGISTRATION   RIGHTS  AGREEMENT"  means  the  Registration  Rights
Agreement,  dated as of the date of this  Agreement,  among the  Company and the
Investors, in the form of Exhibit B hereto.

            "RELATED PERSON" shall have the meaning set forth in Section 4.8.

            "RULE 144" means Rule 144 promulgated by the Commission  pursuant to
the  Securities  Act,  as such Rule may be  amended  from  time to time,  or any
similar  rule  or  regulation   hereafter   adopted  by  the  Commission  having
substantially the same effect as such Rule.

            "SEC REPORTS" has the meaning set forth in Section 3.1(h).

            "SECURITIES"  means the Shares,  the Underlying Shares, the Warrants
and the Warrant Shares.

            "SECURITIES ACT" means the Securities Act of 1933, as amended.

                                       3
<PAGE>

            "SHARES" means the shares of 5% Series A Convertible Preferred Stock
issued or  issuable  to the  Investors  pursuant  to this  Agreement  having the
rights, preferences and privileges set forth in the Certificate of Designation.

            "STATED  VALUE"  has the  meaning  set forth in the  Certificate  of
Designation.

            "STRATEGIC  TRANSACTION"  means a  transaction  in which the Company
issues  shares of Common  Stock or other  securities  of the Company to a Person
which is, itself or through its Subsidiaries, an operating company in a business
synergistic  with the business of the Company and in which the Company  receives
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 or to an entity  whose  primary  business  is  investing  in
securities.

            "SUBSIDIARY"  means any  Person in which the  Company,  directly  or
indirectly, owns capital stock or holds an equity or similar interest.

            "TRADING DAY" means (i) a day on which the Common Stock is traded on
a Trading  Market  (other than the OTC  Bulletin  Board),  or (ii) if the Common
Stock is not listed on a Trading Market (other than the OTC Bulletin  Board),  a
day on which the  Common  Stock is  traded  or  quoted  in the  over-the-counter
market,  as reported by the OTC Bulletin  Board, or (iii) if the Common Stock is
not quoted on a Trading Market, a day on which the Common Stock is quoted in the
over-the-counter   market  as  reported  by  the   National   Quotation   Bureau
Incorporated (or any similar  organization or agency succeeding to its functions
of reporting prices);  provided,  that in the event that the Common Stock is not
listed or quoted as set forth in (i),  (ii) and (iii)  hereof,  then Trading Day
shall mean a Business Day.

            "TRADING MARKET" means whichever of the New York Stock Exchange, the
American Stock Exchange,  the NASDAQ National Market, the NASDAQ SmallCap Market
or OTC Bulletin  Board on which the Common Stock is listed or quoted for trading
on the date in question.

            "TRANSACTION  DOCUMENTS"  means  this  Agreement,  the  Registration
Rights  Agreement,  the Certificate of Designation,  the Warrants,  the Transfer
Agent  Instructions,  the Escrow Agreement and any other documents or agreements
executed in connection with the transactions contemplated hereunder.

            "TRANSFER AGENT" means American Stock Transfer and Trust Company, or
any other transfer agent selected by the Company.

            "TRANSFER AGENT INSTRUCTIONS"  means the Irrevocable  Transfer Agent
Instructions, in the form of Exhibit E, executed by the Company and delivered to
and acknowledged in writing by the Transfer Agent.

            "UNDERLYING  SHARES" means the shares of Common Stock  issuable upon
conversion of the Shares.

                                       4
<PAGE>

            "WARRANTS"  means the Common Stock purchase  warrants in the form of
Exhibit C hereto issued or issuable to the Investors at the Closing.

            "WARRANT  SHARES"  means the shares of Common  Stock  issuable  upon
exercise of the Warrants.

                                  ARTICLE II.
                                PURCHASE AND SALE

      2.1  Closing.  Subject  to the  terms  and  conditions  set  forth in this
Agreement, at the Closing the Company shall issue and sell to each Investor, and
each Investor shall, severally and not jointly,  purchase from the Company, such
number of Shares and a Warrant to purchase such number of Warrant  Shares,  each
as  indicated  below such  Investor's  signature on the  signature  page to this
Agreement.  The Closing  shall take place on the Closing  Date at the offices of
Bryan Cave LLP, 1290 Avenue of the  Americas,  New York,  New York 10104,  or at
such other location as the parties may agree.

      2.2 Closing Deliveries.  (a) At the Closing,  the Company shall deliver or
cause to be delivered to each Investor the following (collectively, the "COMPANY
DELIVERABLES"):

                  (i) this Agreement, duly executed by the Company;

                  (ii) one or more  stock  certificates,  free and  clear of all
restrictive  and other legends  (except as expressly  provided in Section 4.1(b)
hereof),  evidencing  the  number  of Shares  indicated  below  such  Investor's
signature on the  signature  page to this  Agreement,  registered in the name of
such Investor;

                  (iii) a  Warrant,  registered  in the  name of such  Investor,
pursuant  to which such  Investor  shall have the right to acquire the number of
Warrant  Shares  equal to 50% of the  number  of  Underlying  Shares as would be
issuable  upon a conversion  in full of the Shares  issuable to such Investor in
accordance  with  Section  2.2(a)(ii)  without  regard  to  any  limitations  on
conversion of the Shares,  as indicated below such  Investor's  signature on the
signature page to this Agreement;

                  (iv) a copy of the executed,  filed and effective  Certificate
of Designation,  accompanied by a certificate  evidencing the acceptance thereof
by the Secretary of State of the State of Delaware;

                  (v) the  legal  opinion  of  Company  Counsel,  in the form of
Exhibit F hereto, addressed to the Investors;

                  (vi) the Registration  Rights Agreement,  duly executed by the
Company;

                  (vii) the  Escrow  Agreement,  duly  executed  by all  parties
thereto; and

                                       5
<PAGE>

                  (viii) the Transfer Agent  Instructions,  duly executed by the
Company and acknowledged by the Transfer Agent.

            (b) At the  Closing,  each  Investor  shall  deliver  or cause to be
delivered the following:

                  (i) to the Company, this Agreement and the Registration Rights
Agreement, each duly executed by such Investor; and

                  (ii)  to the  Escrow  Agent  in  accordance  with  the  Escrow
Agreement,  such Investor's  Investment  Amount, in United States dollars and in
immediately  available  funds,  by wire  transfer  to an account  designated  in
writing by the Escrow Agent for such purpose.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

      3.1  Representations  and  Warranties of the Company.  The Company  hereby
makes the following representations and warranties to each Investor as follows:

            (a) Subsidiaries. The Company has no direct or indirect Subsidiaries
other than those  listed in Schedule  3.1(a).  Except as  disclosed  in Schedule
3.1(a),  the Company owns,  directly or indirectly,  all of the capital stock or
comparable  equity  interests of each  Subsidiary  free and clear of any and all
Liens, and all the issued and outstanding  shares of capital stock or comparable
equity  interests  of each  Subsidiary  are  validly  issued and are fully paid,
non-assessable and free of preemptive and similar rights.

            (b) Organization and Qualification.  The Company and each Subsidiary
are entities duly  organized,  validly  existing and in good standing  under the
laws of the  jurisdiction of their respective  organization,  with the requisite
power and authority to own and use its  respective  properties and assets and to
carry on its respective  businesses as currently conducted.  Neither the Company
nor any  Subsidiary is in violation of any of the  provisions of its  respective
certificate  or articles of  incorporation,  bylaws or other  organizational  or
charter documents.  The Company and each Subsidiary is duly qualified to conduct
business  and is in good  standing as a foreign  corporation  or other entity in
each  jurisdiction  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, have or reasonably be expected to result in a Material Adverse
Effect.

            (c)  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 hereunder and thereunder.  The execution and delivery of each of the
Transaction  Documents  by  the  Company  and  the  consummation  by it  of  the
transactions  contemplated  hereby and thereby have been duly  authorized by all
necessary  action on the part of the Company and no further consent or action is
required  by the  Company,  its  Board  of  Directors  or  stockholders  .  Each
Transaction Document has been (or upon delivery will have been) duly executed by
the Company  and,  when  delivered in  accordance  with the terms  hereof,  will

                                       6
<PAGE>

constitute the valid and binding obligation of the Company  enforceable  against
the Company in accordance with its terms,  except as such  enforceability may be
limited  by  applicable  bankruptcy,  insolvency,  reorganization,   moratorium,
liquidation or similar laws relating to, or affecting  generally the enforcement
of, creditors'  rights and remedies or by other equitable  principles of general
application.

            (d) No Conflicts.  The  execution,  delivery and  performance of the
Transaction  Documents by the Company and the consummation by the Company of the
transactions  contemplated  hereby and 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  organizational  or  charter
documents, or (ii) conflict with, or constitute a default (or an event that with
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  or a  Subsidiary  is bound or  affected;  except in the case of each of
clauses (ii) and (iii),  such as could not,  individually  or in the  aggregate,
have or reasonably be expected to result in a Material Adverse Effect.

            (e) Filings,  Consents and Approvals. The Company is not 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  filing  with  the  Commission  of one or more  Registration
Statements  in  accordance  with the  requirements  of the  Registration  Rights
Agreement,  (ii) filings  under state  securities  laws in  accordance  with the
requirements of the Registration  Rights Agreement,  which will be made prior to
the  Effectiveness  Date (as such term is  defined  in the  Registration  Rights
Agreement),  (iii) the filings required in accordance with Section 4.7, (iv) the
filing of a Form D with the  Commission,  (v) the filing of the  Certificate  of
Designation  with the Secretary of State of the State of Delaware and (vi) those
that have been made or obtained prior to the date of this Agreement.

            (f)  Issuance  of the  Securities.  The  Securities  have  been duly
authorized  and,  when issued and paid for in  accordance  with the  Transaction
Documents,  will be duly and validly issued, fully paid and nonassessable,  free
and clear of all Liens and shall not be subject to preemptive or similar  rights
of stockholders. The Company has reserved from its duly authorized capital stock
the maximum number of Underlying Shares and Warrants Shares issuable pursuant to
the Shares and the Warrants, as applicable.

            (g) Capitalization. The number of shares and type of all authorized,
issued and  outstanding  capital stock of the Company,  and all shares of Common

                                       7
<PAGE>

Stock  reserved for issuance  under the Company's  various  option and incentive
plans, is set forth in Schedule 3.1(g).  All outstanding shares of capital stock
are duly authorized,  validly issued, fully paid and nonassessable and have been
issued in compliance with all applicable  securities  laws. No securities of the
Company are  entitled to  preemptive  or similar  rights,  and 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.  Except as a result of the  purchase and sale of the  Securities  and
except  as  disclosed  in  Schedule  3.1(g)  or the SEC  Reports,  there  are no
outstanding  options,   warrants,   scrip  rights  to  subscribe  to,  calls  or
commitments of any character  whatsoever  relating to, or securities,  rights or
obligations  convertible  into or exchangeable or exercisable for, or giving any
Person 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 or exercisable  into
shares  of  Common  Stock.  There  are  no  anti-dilution  or  price  adjustment
provisions  contained in any security issued by the Company (or in any agreement
providing  rights to security  holders) and the issue and sale of the Securities
will not, immediately or with the passage of time, obligate the Company to issue
shares  of  Common  Stock or other  securities  to any  Person  (other  than the
Investors)  and will not  result in a right of any holder of  securities  of the
Company to adjust the exercise,  conversion,  exchange or reset price under such
securities. To the knowledge of the Company, except as specifically disclosed in
Schedule  3.1(g),  no Person or group of related Persons  beneficially  owns (as
determined  pursuant to Rule 13d-3 under the Exchange  Act), or has the right to
acquire, by agreement with or by obligation binding upon the Company, beneficial
ownership of in excess of 5% of the outstanding Common Stock,  ignoring for such
purposes  any  limitation  on the  number of shares of Common  Stock that may be
owned at any single time.

            (h) SEC  Reports;  Financial  Statements.  The Company has filed all
reports  required  to be filed by the  Company  under  the  Exchange  Act  since
November 13, 2003 (the foregoing materials being collectively referred to herein
as the `SEC  REPORTS').  The Company has filed all SEC Reports on a timely basis
or has timely  filed a valid  extension of such time of filing and has filed any
such SEC Reports  prior to the  expiration  of any such  extension.  As of their
respective  dates,  the SEC Reports  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
Reports,  when  filed,  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 the light of the circumstances  under
which they were made, not  misleading.  The financial  statements of the Company
included in the SEC Reports were prepared in  accordance  with GAAP applied on a
consistent  basis  during  the  periods  involved,  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,  year-end  audit  adjustments.  All  material
agreements  to which the  Company or any  Subsidiary  is a party or to which the
property or assets of the Company or any  Subsidiary are subject are included as
part of or specifically identified in the SEC Reports.

                                       8
<PAGE>

            (i) Press Releases.  The press releases  disseminated by the Company
since November 13, 2003 taken as a whole do not contain any untrue  statement of
a material fact or omit to state a material  fact required to be stated  therein
or  necessary  in order  to make the  statements  therein,  in the  light of the
circumstances under which they were made, not misleading.

            (j) Material Changes.  Except as set forth in Schedule 3.1(j) and as
disclosed in the SEC  Reports,  since the date of the latest  audited  financial
statements  included  within  the SEC  Reports,  (i)  there  has been no  event,
occurrence or development  that has had or that could  reasonably be expected to
result in a Material  Adverse  Effect,  (ii) the  Company has not  incurred  any
liabilities  (contingent or otherwise) other than (A) trade payables and accrued
expenses  incurred  in the  ordinary  course of  business  consistent  with past
practice and (B)  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,  (iii) the  Company  has not  altered  its  method of
accounting or the identity of its auditors, (iv) the Company has not declared or
made any dividend or distribution of cash or other property to its  stockholders
or purchased,  redeemed or made any  agreements to purchase or redeem any shares
of its  capital  stock,  other than  dividends  paid in the  ordinary  course on
outstanding series of the Company's preferred stock, and (v) the Company has not
issued any equity  securities  to any  officer,  director or  Affiliate,  except
pursuant  to existing  Company  stock  option  plans or  executive  compensation
arrangements.  The  Company  does not have  pending  before the  Commission  any
request for confidential treatment of information.

            (k)  Litigation.  There is no Action that (i)  adversely  affects or
challenges the legality,  validity or  enforceability  of any of the Transaction
Documents  or the  Securities  or (ii)  except as set forth in the SEC  Reports,
could, if there were an unfavorable decision,  individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect. Except as
set forth in the SEC Reports,  neither the Company nor any  Subsidiary,  nor any
presently serving director or officer thereof,  is or has been during the period
from  January  1, 1999  through  the  Closing  Date the  subject  of any  Action
involving a claim of violation of or liability under federal or state securities
laws or a claim of  breach of  fiduciary  duty.  There has not been,  and to the
knowledge  of  the  Company,   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. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration  statement filed
by the Company or any Subsidiary under the Exchange Act or the Securities Act.

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

            (m)  Compliance.  Neither the Company nor any  Subsidiary  (i) is in
default  under or in violation  of (and no event has occurred  that has not been
waived that, 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

                                       9
<PAGE>

instrument  to which it is a party  or by which it or any of its  properties  is
bound  (whether or not such default or violation  has been  waived),  (ii) is in
violation of any order of any court,  arbitrator or governmental  body, or (iii)
is or  has  been  in  violation  of  any  statute,  rule  or  regulation  of any
governmental authority, including without limitation all foreign, federal, state
and local laws relating to taxes, environmental protection,  occupational health
and safety, product quality and safety and employment and labor matters,  except
in each case as could not, individually or in the aggregate,  have or reasonably
be expected to result in a Material Adverse Effect. The Company is in compliance
with the applicable  requirements of the Sarbanes-Oxley Act of 2002, as amended,
and the rules and regulations thereunder,  except where such noncompliance could
not have or reasonably be expected to result in a Material Adverse Effect.

            (n) Regulatory Permits. The Company and the Subsidiaries possess all
certificates,  authorizations  and permits  issued by the  appropriate  federal,
state,  local or foreign  regulatory  authorities  necessary  to  conduct  their
respective businesses as described in the SEC Reports,  except where the failure
to possess such permits would not,  individually  or in the  aggregate,  have or
reasonably be expected to result in a Material  Adverse Effect,  and neither the
Company nor any Subsidiary  has received any notice of  proceedings  relating to
the revocation or modification of any such permits.

            (o) Title to Assets. The Company and the Subsidiaries do not own any
real property.  The Company and the Subsidiaries  have good and marketable title
in all  personal  property  owned by them that is material  to their  respective
businesses, in each case free and clear of all Liens, except for Liens described
in the SEC  Reports  and  Liens as do not  materially  affect  the value of such
property and do not  materially  interfere  with the use made and proposed to be
made of such property by the Company and the Subsidiaries. Any real property and
facilities held under lease by the Company and the Subsidiaries are held by them
under  valid,  subsisting  and  enforceable  leases of which the Company and the
Subsidiaries  are in  compliance,  except as could not,  individually  or in the
aggregate,  have or  reasonably  be  expected  to result in a  Material  Adverse
Effect.

            (p) Patents and Trademarks.  The Company and the Subsidiaries  have,
or have rights to use, all  Intellectual  Property  Rights that are necessary or
material for use in connection with their respective  businesses as described in
the SEC Reports and which the failure to so have could,  individually  or in the
aggregate,  have or  reasonably  be  expected  to result in a  Material  Adverse
Effect.  Neither the Company nor any  Subsidiary  has received a written  notice
that the  Intellectual  Property  Rights used by the  Company or any  Subsidiary
violates or infringes upon the rights of any Person.  Except as set forth in the
SEC  Reports,  to the  knowledge,  after due inquiry,  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)  Insurance.  The  Company  and the  Subsidiaries  are insured by
insurers of recognized  financial  responsibility  against such losses and risks
and in such amounts as are prudent and customary in the  businesses in which the
Company and the Subsidiaries  are engaged.  The Company has no reason to believe
that it or its  Subsidiaries  will not be able to renew its respective  existing
insurance  coverage  as and when such  coverage  expires  or to  obtain  similar

                                       10
<PAGE>

coverage  from  similar  insurers as may be  necessary  to continue its business
without a significant increase in cost.

            (r) Transactions With Affiliates and Employees.  Except as set forth
in the SEC Reports or Schedule 3.1(r),  none of the officers or directors of the
Company and, to the knowledge,  after due inquiry,  of the Company,  none of the
employees  of the  Company  is  presently  a party to any  transaction  with the
Company or any  Subsidiary  (other than for services as employees,  officers and
directors), including any contract, agreement or other arrangement providing for
the  furnishing  of services to or by,  providing for rental of real or personal
property to or from,  or  otherwise  requiring  payments to or from any officer,
director  or such  employee  or, to the  knowledge,  after due  inquiry,  of the
Company, any entity in which any officer,  director,  or any such employee has a
substantial interest or is an officer, director, trustee or partner.

            (s) Internal Accounting  Controls.  The Company and the Subsidiaries
maintain  a  system  of  internal  accounting  controls  sufficient  to  provide
reasonable  assurance  that (i)  transactions  are executed in  accordance  with
management's general or specific authorizations,  (ii) transactions are recorded
as necessary to permit  preparation of financial  statements in conformity  with
generally accepted accounting  principles and to maintain asset  accountability,
(iii) access to assets is permitted only in accordance with management's general
or specific  authorization,  and (iv) the recorded  accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. The Company has established disclosure
controls  and  procedures  (as defined in Rules  13a-15e  and 15d-15e  under the
Exchange  Act)  for the  Company  and  designed  such  disclosure  controls  and
procedures  to  ensure  that  material  information  relating  to  the  Company,
including its Subsidiaries,  is made known to the certifying  officers by others
within those entities.

            (t) Solvency.  Based on the financial condition of the Company as of
the Closing Date (and assuming that the Closing  shall have  occurred),  (i) the
Company's  fair  saleable  value of its assets  exceeds  the amount that will be
required to be paid on or in respect of the Company's  existing  debts and other
liabilities  (including known contingent  liabilities) as they mature;  (ii) the
Company's  assets do not constitute  unreasonably  small capital to carry on its
business  for the  current  fiscal year as now  conducted  and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements  of the business  conducted by the Company,  and projected  capital
requirements and capital  availability  thereof; and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive, were it to
liquidate all of its assets,  after taking into account all anticipated  uses of
the cash,  would be  sufficient  to pay all amounts on or in respect of its debt
when such amounts are required to be paid.  The Company does not intend to incur
debts  beyond its ability to pay such debts as they mature  (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).

            (u)  Certain  Fees.  Except as  described  in  Schedule  3.1(u),  no
brokerage or finder's fees or commissions  are or 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 Investors  shall have no obligation  with

                                       11
<PAGE>

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.

            (v)  Certain  Registration  Matters.  Assuming  the  accuracy of the
Investors'  representations and warranties set forth in Section  3.2(b)-(e),  no
registration  under the Securities Act is required for the offer and sale of the
Securities  by the Company to the  Investors  under the  Transaction  Documents.
Neither the Company nor any Person  acting on the  Company's  behalf has sold or
offered to sell or  solicited  any offer to buy the  Securities  by means of any
form of general solicitation or advertising.  Neither the Company nor any of its
Affiliates  nor any Person  acting on the  Company's  behalf  has,  directly  or
indirectly,  at any time within the past six  months,  made any offer or sale of
any  security  or   solicitation   of  any  offer  to  buy  any  security  under
circumstances  that would (i) eliminate the  availability  of the exemption from
registration  under Regulation D under the Securities Act in connection with the
offer  and sale of the  Securities  as  contemplated  hereby  or (ii)  cause the
offering  of  the  Securities  pursuant  to  the  Transaction  Documents  to  be
integrated  with prior  offerings by the Company for purposes of any  applicable
law,  regulation  or  stockholder   approval  provisions,   including,   without
limitation,  under the rules and regulations of any Trading  Market,  that could
cause this  transaction  to require the approval of the Company's  stockholders.
Except as described in Schedule 3.1(v), 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 that have not been satisfied.

            (w) Listing and Maintenance Requirements. Except as specified in the
SEC Reports,  the Company has not received notice from any Trading Market to the
effect that the  Company is not in  compliance  with the listing or  maintenance
requirements  thereof. The Company is, and has no reason to believe that it will
not in the foreseeable future continue to be, in compliance with the listing and
maintenance  requirements  for  continued  listing  of the  Common  Stock on the
Trading  Market.  The issuance and sale of the Securities  under the Transaction
Documents does not contravene the rules and regulations of the Trading Market on
which the Common Stock is currently listed or quoted.

            (x) Investment Company.  The Company is not, is not an Affiliate of,
and immediately upon the Closing will not become, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.

            (y) Application of Takeover  Protections.  The Company has taken all
necessary  action,  if any, in order to render  inapplicable  any control  share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company's
Certificate of Incorporation  (or similar charter  documents) or the laws of its
state of incorporation  that is or could become applicable to the Investors as a
result  of the  Investors  and  the  Company  fulfilling  their  obligations  or
exercising  their rights under the  Transaction  Documents,  including,  without
limitation,  the  Company's  issuance  of  the  Securities  and  the  Investors'
ownership of the Securities.

                                       12
<PAGE>

            (z)  No  Additional  Agreements.  The  Company  does  not  have  any
agreement or  understanding  with any Investor with respect to the  transactions
contemplated  by the  Transaction  Documents  other  than  as  specified  in the
Transaction Documents.

            (aa) Disclosure.  Except as described in Schedule 3.1(aa) or as will
be  disclosed  in the 8-K Filing (as such term is defined  herein),  the Company
confirms that neither it nor any Person acting on its behalf has provided any of
the Investors or their agents or counsel with any  information  that the Company
believes constitutes material,  non-public information.  The Company understands
and confirms that the Investors will rely on the foregoing  representations  and
covenants in effecting transactions in securities of the Company. All disclosure
provided  to  the  Investors  regarding  the  Company,   its  business  and  the
transactions  contemplated  hereby,  furnished  by or on behalf  of the  Company
(including  the  Company's  representations  and  warranties  set  forth in this
Agreement)  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 the light of the circumstances under which they were
made, not misleading.

            (bb) Acknowledgment Regarding Investors' Purchase of Securities. The
Company  acknowledges  and agrees that each of the Investors is acting solely in
the  capacity  of an arm's  length  purchaser  with  respect to the  Transaction
Documents  and the  transactions  contemplated  hereby and thereby.  The Company
further  acknowledges  that no  Investor  is acting as a  financial  advisor  or
fiduciary of the Company or any other Investor (or in any similar capacity) with
respect to the Transaction  Documents and the transactions  contemplated  hereby
and thereby  and any advice  given by any  Investor  or any of their  respective
representatives  or agents in connection with the Transaction  Documents and the
transactions  contemplated  hereby  and  thereby  is merely  incidental  to such
Investor's  purchase of the Securities.  The Company further  represents to each
Investor that the Company's decision to enter into the Transaction Documents has
been based solely on the independent evaluation of the transactions contemplated
hereby by the Company and its representatives.

            (cc) Form SB-2. In accordance with  Commission's  rules, the Company
is  eligible  to  utilize  Form SB-2 for the  registration  of the resale of its
securities.

      3.2 Representations and Warranties of the Investors. Each Investor hereby,
for itself and for no other Investor,  represents and warrants to the Company as
follows:

            (a) Organization;  Authority;  Residency. Such Investor 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 applicable  Transaction Documents and otherwise to carry out
its obligations  hereunder and thereunder.  The purchase by such Investor of the
Shares and the Warrants  hereunder  has been duly  authorized  by all  necessary
action on the part of such Investor. Each of this Agreement and the Registration
Rights Agreement has been duly executed by such Investor,  and when delivered by

                                       13
<PAGE>

such Investor in accordance  with terms hereof,  will  constitute  the valid and
legally  binding  obligation  of  such  Investor,   enforceable  against  it  in
accordance  with its  terms,  except as such  enforceability  may be  limited by
applicable bankruptcy,  insolvency,  reorganization,  moratorium, liquidation or
similar laws relating to, or affecting  generally the enforcement of, creditors'
rights and remedies or by other  equitable  principles  of general  application.
Such Investor  represents  that, to the extent that he or she is an  individual,
that he or she is a resident of the state set forth  opposite his or her name on
its  signature  page  to  this  Agreement,  and,  to the  extent  that  it is an
organizational  entity,  it has been  organized  under  the laws of the state or
country set forth opposite its name on its signature page to this Agreement.

            (b) Investment Intent.  Such Investor 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 Investor's right at all times to sell or otherwise
dispose of all or any part of such  Securities  in  compliance  with  applicable
federal and state  securities laws.  Nothing  contained herein shall be deemed a
representation  or warranty  by such  Investor  to hold the  Securities  for any
period of time.  Such  Investor is  acquiring  the  Securities  hereunder in the
ordinary  course of its  business.  Such Investor does not have any agreement or
understanding,  directly or indirectly, with any Person to distribute any of the
Securities.

            (c) Investor  Status.  Such Investor is an "accredited  investor" as
defined in Rule 501(a) under the Securities  Act,  knowledgeable,  sophisticated
and experienced in making,  and is qualified to make,  decisions with respect to
an investment  decision  like that  involved in the purchase of the  Securities.
Such Investor  recognizes  that an investment in the Securities  involves a high
degree of risk, including a risk of total loss of such investment. Such Investor
understands,  acknowledges and agrees that it must bear the economic risk of its
investment in the Securities for an indefinite  period of time. Such Investor is
not a registered broker-dealer under Section 15 of the Exchange Act.

            (d)  General  Solicitation.  Such  Investor  is not  purchasing  the
Securities  as  a  result  of  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.

            (e) Access to Information.  Such Investor  acknowledges  that it has
reviewed the Disclosure Materials (including the information set forth under the
caption  entitled  "Risk Factors"  contained in the Company's  Current Report on
Form 8-K/A filed on January 26, 2004) 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 Shares and the merits and risks of investing in the  Securities;
(ii) access to  information  about the Company  and the  Subsidiaries  and their
respective 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 information  that 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.  Neither  such
inquiries nor any other investigation conducted by or on behalf of such Investor

                                       14
<PAGE>

or its representatives or counsel shall modify,  amend or affect such Investor'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.

            (f) Independent Investment Decision. Such Investor has independently
evaluated  the merits of its  decision to purchase  Securities  pursuant to this
Agreement,  and such  Investor  confirms that it has not relied on the advice of
any other Investor's  business and/or legal counsel in making such decision.  If
such  Investor is other than the Lead  Investor,  such Investor  represents  and
warrants  that Bryan Cave LLP has not acted as its legal  counsel in  connection
with the transactions contemplated by this Agreement.

The  Company  acknowledges  and agrees  that no  Investor  has made or makes any
representations  or  warranties  with respect to the  transactions  contemplated
hereby other than those specifically set forth in this Section 3.2.

                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

      4.1  Restrictions  on Transfer.  (a) Securities may only be disposed of in
compliance  with state and  federal  securities  laws.  In  connection  with any
transfer of the  Securities  other than  pursuant to an  effective  registration
statement,  to the Company, to an Affiliate of an Investor or in connection with
a pledge as  contemplated  in  Section  4.1(b),  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.

            (b)   Certificates   evidencing  the  Securities  will  contain  the
following legend, until such time as they are not required under Section 4.1(c):

            [NEITHER  THESE   SECURITIES   NOR  THE  SECURITIES   ISSUABLE  UPON
            EXERCISE/CONVERSION OF THESE SECURITIES HAVE BEEN REGISTERED] [THESE
            SECURITIES  HAVE  NOT  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  AS  EVIDENCED  BY A LEGAL
            OPINION OF COUNSEL TO THE  TRANSFEROR TO SUCH EFFECT,  THE SUBSTANCE
            OF  WHICH   SHALL  BE   REASONABLY   ACCEPTABLE   TO  THE   COMPANY.
            NOTWITHSTANDING THE FOREGOING,  [THESE SECURITIES AND THE SECURITIES
            ISSUABLE  UPON   EXERCISE/CONVERSION  OF  THESE  SECURITIES]  [THESE
            SECURITIES]  MAY BE PLEDGED IN  CONNECTION  WITH A BONA FIDE  MARGIN
            AGREEMENT OR ACCOUNT OR OTHER LOAN OR FINANCING  ARRANGEMENT SECURED
            BY SUCH SECURITIES.

                                       15
<PAGE>

            The Company  acknowledges  and agrees that an Investor may from time
to  time  pledge,  and/or  grant  a  security  interest  in  some  or all of the
Securities  pursuant to a bona fide margin  agreement in connection  with a bona
fide margin agreement or account or other loan or financing  arrangement and, if
required under the terms of such agreement or account, loan or arrangement, such
Investor may transfer  pledged or secured  Securities to the pledgees or secured
parties.  Such a pledge or transfer  would not be subject to approval or consent
of the Company and no legal  opinion of legal  counsel to the  pledgee,  secured
party or pledgor shall be required in connection with the pledge, but such legal
opinion may be required  in  connection  with a  subsequent  transfer  following
default by the Investor transferee of the pledge. No notice shall be required of
such pledge. At the appropriate Investor's expense, the Company will execute and
deliver  such  reasonable  documentation  as  a  pledgee  or  secured  party  of
Securities may reasonably request in connection with a pledge or transfer of the
Securities  including  the  preparation  and filing of any  required  prospectus
supplement  under  Rule  424(b)(3)  of the  Securities  Act or other  applicable
provision  of the  Securities  Act to  appropriately  amend the list of  Selling
Stockholders thereunder.

            (c)  Certificates  evidencing  Underlying  Shares and Warrant Shares
shall not contain any legend (including the legend set forth in Section 4.1(b)):
(i) if a Conversion  Notice under the  Certificate  of  Designation  or Exercise
Notice under the Warrant (as the case may be) is delivered  while a Registration
Statement is effective and the  converting or  exercising  holder  undertakes to
sell the Underlying  Shares  issuable in respect of such  conversion or exercise
pursuant  to the  prospectus  forming  a part  of  the  applicable  Registration
Statement,  or (ii)  following  a sale of such  Shares  pursuant to Rule 144, or
(iii) while such Shares are eligible for sale under Rule 144(k), or (iv) if such
legend is not required  under  applicable  requirements  of the  Securities  Act
(including judicial  interpretations  and pronouncements  issued by the Staff of
the Commission). During such time as a Registration Statement is effective as to
the Underlying Shares or such other time as restrictive legends are not required
to be placed on certificates  representing  Underlying Shares or Warrant Shares,
the Company will, no later than three Trading Days  following the delivery by an
Investor to the Company or the Transfer Agent of a certificate representing such
Underlying Shares or Warrant Shares that contain a restrictive  legend,  deliver
or  cause  to be  delivered  to such  Investor  certificates  representing  such
Underlying  Shares and  Warrant  Shares that are free from all  restrictive  and
other legends, provided that the Staff of the Commission does not publicly state
removing the restrictive legend under such circumstances is against the law. The
Company may not make any  notation on its  records or give  instructions  to any
transfer  agent of the Company  that  enlarge the  restrictions  on transfer set
forth in this Section. For so long as any Investor owns Securities,  the Company
will not effect or  publicly  announce  its  intention  to effect any  exchange,
recapitalization  or other  transaction  that  effectively  requires  or rewards
physical delivery of certificates evidencing the Common Stock.

                                       16
<PAGE>

      4.2 Furnishing of Information. As long as any Investor owns the Securities
that are not  eligible  for  resale  under  Rule  144(k)  promulgated  under the
Securities  Act, 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 the
Exchange Act. As long as any Investor owns  Securities that are not eligible for
resale under Rule 144(k) promulgated under the Securities Act, if the Company is
not required to file reports  pursuant to the Exchange  Act, it will prepare and
furnish to the  Investors and make  publicly  available in accordance  with Rule
144(c) such  information  as is required  for the  Investors  to sell the Shares
under Rule 144.  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 such  Shares  without
registration  under the  Securities  Act within the limitation of the exemptions
provided by Rule 144.

      4.3 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 Investors,  or that would be
integrated  with the offer or sale of the  Securities  for purposes of the rules
and  regulations  of any  Trading  Market such that  approval  of the  Company's
stockholders  could be  required to  consummate  the  transactions  contemplated
hereby.

      4.4  Subsequent  Registrations.  Other than  pursuant to the  Registration
Statement,   prior  to  the  Effective  Date,  the  Company  may  not  file  any
registration statement (other than on Form S-8) with the Commission with respect
to any securities of the Company.

      4.5  Reservation of Securities.  The Company shall maintain a reserve from
its duly  authorized  shares  of  Common  Stock  for  issuance  pursuant  to the
Transaction  Documents  in  such  amount  as  may be  required  to  fulfill  its
obligations in full under the  Transaction  Documents.  In the event that at any
time the then authorized shares of Common Stock are insufficient for the Company
to satisfy its obligations in full under the Transaction Documents,  the Company
shall  promptly  take such  actions as may be required to increase the number of
authorized shares.

      4.6 Lockup;  Subsequent Placements and Certain Securities  Offerings.  (a)
Subject to Section 4.6(d),  except for the Securities  issued or issuable to the
Investors  pursuant to the Transaction  Documents,  the Company shall not offer,
issue,  sell, or enter into  agreements to offer,  issue or sell,  any shares of
Common Stock or any Common Stock  Equivalents  until the 180th day following the
Closing;  plus one  additional  Trading Day for each Trading Day  following  the
earlier to occur of the Effective Date and the Effectiveness Date (as defined in
the  Registration  Rights  Agreement)  during  which  either (i) a  Registration
Statement is not effective or (ii) the prospectus  forming a portion of any such
Registration  Statement  is not  available  for the  resale  of all  Registrable
Securities required to be covered thereby.

                                       17
<PAGE>

            (b) Prior to the Closing,  the Company shall cause its directors and
executive  officers and any holder of 5% or more of its capital  stock who is an
Affiliate of a director or officer to not offer, sell, contract to sell, pledge,
enter  into any short  sales (as  defined  in Rule  3b-3  promulgated  under the
Exchange Act) or hedging  transactions of any nature,  or otherwise  dispose of,
directly  or  indirectly,  any  shares  of  Common  Stock  or any  Common  Stock
Equivalents,  until after the 180th Trading Day following the Closing;  provided
that the 180-day period specified in the immediately preceding sentence shall be
extended by one Trading Day for each Trading Day  following the earlier to occur
of the  Effective  Date and the  Effectiveness  Date during  which  either (i) a
Registration Statement is not effective or (ii) the prospectus forming a portion
of any such  Registration  Statement  is not  available  for the  resale  of all
Registrable Securities required to be covered thereby. The Company shall provide
Investors with copies of the agreements  evidencing the lockup  required by this
Section in form reasonably satisfactory to the Lead Investor.

            (c) Subject to Section 4.6(d),  in the event the Company at any time
prior to the one year  anniversary of the Closing Date,  directly or indirectly,
offers,  sells,  grants any option to  purchase,  or  otherwise  disposes of (or
announces any offer,  sale, grant or any option to purchase or other disposition
of) any of Common Stock or Common Stock  Equivalents or any of its Subsidiaries'
equity or Common Stock  Equivalents  (such offer,  sale,  grant,  disposition or
announcement being referred to as a "SUBSEQUENT  PLACEMENT"),  the Company shall
deliver  to each  Investor  a written  notice  (each,  a  "SUBSEQUENT  PLACEMENT
NOTICE") of its intention to effect such Subsequent  Placement,  which specifies
in reasonable detail all of the material terms of such Subsequent Placement, the
aggregate amount of proceeds intended to be raised thereunder,  the names of the
investors  (including the investment manager of such investors,  if any) and the
investment  bankers  with whom  such  Subsequent  Placement  is  proposed  to be
effected, and attached to which shall be a term sheet or similar document.  Each
Investor  shall have until 5:30 p.m.  (New York City time) on the fifth  Trading
Day after its respective  receipt of the Subsequent  Placement  Notice to notify
Company  of  its  intention  to  provide,  subject  to  completion  of  mutually
acceptable  documentation,  its pro rata portion of 50% of such financing on the
same terms as set forth in the Subsequent  Placement  Notice.  In the event that
the Investors do not timely elect to provide financing subject to the Subsequent
Placement  Notice and the Company shall not have  consummated the portion of the
Subsequent Placement for which such elections shall not have been so made on the
terms and to the Persons specified in the Subsequent  Placement Notice within 30
days following the expiration of the time to so elect, the Company shall provide
each Investor with a second  Subsequent  Placement Notice and each Investor will
again have the right of  participation  set forth in this Section.  The one year
period  specified in this sentence shall be extended by one Trading Day for each
Trading  Day  following  the  earlier  to  occur of the  Effective  Date and the
Effectiveness  Date during  which  either (i) a  Registration  Statement  is not
effective  or (ii) the  prospectus  forming a portion  of any such  Registration
Statement is not available for the resale of all Registrable Securities required
to be covered thereby.

            (d) The Company's obligations under Section 4.6(a) and (c) shall not
apply to any grant or issuance by the Company of any of the  following:  (i) the
issuance of  securities  upon the exercise or  conversion of any Common Stock or
Common  Stock  Equivalents  issued by the Company  prior to the date hereof (but

                                       18
<PAGE>

will apply to any amendments,  modifications and reissuances thereof),  (ii) the
grant of options,  warrants or other  Common  Stock  Equivalents  under any duly
authorized  Company stock option,  restricted  stock plan or stock purchase plan
whether now existing or hereafter  approved by the Company and its  stockholders
in the future (but not as to any amendments or other modifications to the number
of Common  Stock  issuable  thereunder,  the terms  set  forth  therein,  or the
exercise price set forth therein,  unless such amendments or other modifications
are approved by the Company's  stockholders) and the issuance of Common Stock in
respect  thereof,  or (iii)  securities  granted or issued in connection  with a
Strategic  Transaction or as the purchase  price for the  acquisition of a third
party  company  or all or a  portion  of the  assets of a third  party  company.
Notwithstanding  anything to the contrary  contained in Section 4.6(a),  nothing
shall  prohibit the Company from  offering,  selling or issuing any Common Stock
(i) in connection with a firm commitment  underwritten public offering of Common
Stock  resulting  in net  proceeds to the  Company of not less than  $15,000,000
(which  shall not  include  equity  lines of credit  or  takedowns  off of shelf
registration  statements  or  similar  transactions);  (ii) in  connection  with
equipment  leases or the purchase of  equipment  in the  ordinary  course of its
business, provided such leases or equipment purchases are otherwise on customary
terms;  or (iii) issued to the Company's  primary lender in connection  with the
Company's  credit  relationship  therewith  or  any  renewal,   modification  or
refinancing thereof;  provided, that such transaction is not primarily an equity
capital raising transaction.

      4.7 Securities  Laws  Disclosure;  Publicity.  By 9:00 a.m. (New York City
time) within two Trading Days following the date that this Agreement is executed
by the parties, the Company will issue a press release and file a Current Report
on Form 8-K to disclose the execution of this  Agreement and the material  terms
of the transactions  contemplated by the Transaction  Documents.  On the Closing
Date,  the Company shall file a Current  Report on Form 8-K with the  Commission
(the "8-K FILING") describing the terms of the transactions  contemplated by the
Transaction  Documents and including as exhibits to such Current  Report on Form
8-K  this  Agreement  and the form of  Warrants,  in the  form  required  by the
Exchange Act. Thereafter,  the Company shall timely file any filings and notices
required  to be made by the Company by the  Commission  or  applicable  law with
respect to the transactions  contemplated hereby. Except with respect to the 8-K
Filing and the press release  referenced above (a copy of which will be provided
to the Investors for their review as early as practicable  prior to its filing),
the  Company  shall,   at  least  two  Trading  Days  prior  to  the  filing  or
dissemination  of any  disclosure  required  by this  paragraph,  provide a copy
thereof to the Investors for their review.  The Company and the Investors  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  Trading   Market  with  respect  to  the   transactions
contemplated  hereby,  and neither  party shall issue any such press  release or
otherwise make any such public statement,  filing or other communication without
the prior consent of the other, except if such disclosure is required by law, in
which case the  disclosing  party  shall  promptly  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 name
of any  Investor,  or include  the name of any  Investor  in any filing with the
Commission  (other than the  Registration  Statement and any exhibits to filings
made  in  respect  of  this  transaction  in  accordance  with  periodic  filing
requirements under the Exchange Act) or any regulatory agency or Trading Market,

                                       19
<PAGE>

without the prior written  consent of such  Investor,  except to the extent such
disclosure is required by law or Trading Market  regulations,  in which case the
Company shall provide the Investors  with prior notice of such  disclosure.  The
Company shall not, and shall cause each of its  Subsidiaries and its and each of
their respective officers,  directors,  employees and agents not to, provide any
Investor with any material nonpublic information regarding the Company or any of
its Subsidiaries from and after the filing of the 8-K Filing without the express
written  consent  of such  Investor.  In the event of a breach of the  foregoing
covenant  by  the  Company,  any  of its  Subsidiaries,  or any of its or  their
respective officers,  directors,  employees and agents, in addition to any other
remedy provided herein or in the Transaction  Documents,  an Investor shall have
the right to make a public  disclosure,  in the form of a press release,  public
advertisement or otherwise,  of such material nonpublic  information without the
prior  approval  by the  Company,  its  Subsidiaries,  or  any  of its or  their
respective officers, directors,  employees or agents. No Investor shall have any
liability to the Company,  its  Subsidiaries,  or any of its or their respective
officers, directors, employees,  stockholders or agents for any such disclosure.
Subject to the  foregoing,  neither the Company nor any Investor shall issue any
press releases or any other public  statements with respect to the  transactions
contemplated  hereby;  provided,  however,  that the Company  shall be entitled,
without the prior  approval of any Investor,  to make any press release or other
public   disclosure  with  respect  to  such  transactions  (i)  in  substantial
conformity  with the 8-K Filing and  contemporaneously  therewith and (ii) as is
required by applicable law and regulations  (provided that in the case of clause
(i) each Investor shall be consulted by the Company in connection  with any such
press release or other public disclosure prior to its release).

      4.8  Limitation  on Issuance of Future Priced  Securities.  During the six
months following the Closing Date, the Company shall not issue any security that
would  be a  "Future  Priced  Securities"  as  such  term is  described  by NASD
IM-4350-1.

      4.9  Reimbursement.  If any  Investor  or any  of  its  Affiliates  or any
officer, director, partner, controlling Person, employee or agent of an Investor
or any of its Affiliates (a "RELATED  PERSON")  becomes involved in any capacity
in any  Proceeding  brought by or against any Person in connection  with or as a
result  of the  transactions  contemplated  by the  Transaction  Documents,  the
Company will indemnify and hold harmless such Investor or Related Person for its
reasonable legal and other expenses  (including the costs of any  investigation,
preparation and travel) and for any Losses incurred in connection therewith,  as
such expenses or Losses are incurred, excluding only Losses that result directly
from such Investor's or Related Person's gross negligence or willful misconduct.
In addition,  the Company  shall  indemnify  and hold harmless each Investor and
Related Person from and against any and all Losses, as incurred,  arising out of
or  relating  to any  breach  by  the  Company  of  any of the  representations,
warranties  or  covenants  made by the  Company in this  Agreement  or any other
Transaction  Document,  or any allegation by a third party that, if true,  would
constitute   such  a  breach.   The  conduct  of  any   Proceedings   for  which
indemnification  is available  under this paragraph shall be governed by Section
5(c) of the Registration Rights Agreement.  The  indemnification  obligations of
the Company under this paragraph  shall be in addition to any liability that the
Company may otherwise have and shall be binding upon and inure to the benefit of
any successors, assigns, heirs and personal representatives of the Investors and
any such Related Persons. The Company also agrees that neither the Investors nor
any  Related  Persons  shall  have any  liability  to the  Company or any Person

                                       20
<PAGE>

asserting  claims on behalf of or in right of the Company in connection  with or
as a result  of the  transactions  contemplated  by the  Transaction  Documents,
except to the extent that any Losses  incurred  by the  Company  result from the
breach of any  representation  or warranty  contained  in this  Agreement by the
applicable  Investor  or the  gross  negligence  or  willful  misconduct  of the
applicable  Investor or Related Person in connection with such transactions.  If
the Company breaches its obligations  under any Transaction  Document,  then, in
addition to any other  liabilities  the  Company may have under any  Transaction
Document or applicable  law, the Company shall pay or reimburse the Investors on
demand  for all  costs  of  collection  and  enforcement  (including  reasonable
attorneys fees and expenses).  Without limiting the generality of the foregoing,
the Company  specifically  agrees to reimburse  the  Investors on demand for all
costs of enforcing the indemnification obligations in this paragraph.

      4.10 Use of Proceeds. The Company shall use the net proceeds from the sale
of the Securities  hereunder for working capital  purposes,  including,  but not
limited to, the purchase of capital equipment, equipment installation, marketing
and  market  research  and up to  $600,000  of  such  net  proceeds  to  fulfill
outstanding  monetary  obligations  to  certain  of  its  Affiliates;  and up to
$500,000  additional  amount of such net proceeds to repay any bridge  financing
disclosed in Schedule 3.1(l).

                                   ARTICLE V.
                         CONDITIONS PRECEDENT TO CLOSING

      5.1 Conditions Precedent to Obligations of the Investors.  Each Investor's
obligation to purchase  Securities at the Closing is subject to the satisfaction
or waiver by such Investor of the following conditions:

            (a)   Representations   and  Warranties.   The  representations  and
warranties  of the  Company  contained  herein  shall be true and correct in all
material  respects as of the date when made and as of the Closing as though made
on and as of such date.

            (b) Performance of Obligations.  The Company shall have performed in
all material  respects all agreements and covenants  required to be performed by
it under this Agreement prior to the Closing Date.

            (c) No Injunction.  No statute, rule,  regulation,  executive order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent  jurisdiction that
prohibits  the  consummation  of  any of the  transactions  contemplated  by the
Transaction Documents.

                                       21
<PAGE>

            (d) No  Material  Adverse  Effect.  Between  the  execution  of this
Agreement and the Closing,  no event or series of events (other than stock price
fluctuations)  shall have occurred which reasonably would be expected to have or
result in a Material Adverse Effect.

            (e) Company  Deliverables.  The Company shall have  delivered all of
the Company Deliverables for distribution at Closing.

            (f)  Minimum   Subscriptions.   The  aggregate  of  all   Investors'
Investment  Amounts delivered to the Escrow Agent in accordance with Section 2.2
and the Escrow Agreement shall not be less than $10,000,000.

            (g) Closing Date. The Closing shall have occurred by April 16, 2004.

      5.2  Conditions  Precedent to  Obligations  of the Company.  The Company's
obligation  to issue and sell the  Shares to each  Investor  at the  Closing  is
subject  to the  satisfaction,  or  waiver  by  the  Company,  of the  following
conditions:

            (a)   Representations   and  Warranties.   The  representations  and
warranties  of each Investor  contained  herein shall be true and correct in all
material  respects as of the date when made and as of the Closing Date as though
made on and as of such date.

            (b) Performance of  Obligations.  Such Investor shall have performed
in all material  respects all agreements and covenants  required to be performed
by it under this Agreement prior to the Closing Date.

            (c) No Injunction.  No statute, rule,  regulation,  executive order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent  jurisdiction that
prohibits  the  consummation  of  any of the  transactions  contemplated  by the
Transaction Documents.

            (d)  Minimum   Subscriptions.   The  aggregate  of  all   Investors'
Investment  Amounts delivered to the Escrow Agent in accordance with Section 2.2
and the Escrow Agreement shall not be less than $10,000,000.

            (e) Closing Date. The Closing shall have occurred by April 16, 2004.

                                  ARTICLE VI.
                                  MISCELLANEOUS

      6.1  Termination.  This  Agreement may be terminated by the Company or the
Lead Investor,  by written  notice to the other parties,  if the Closing has not
been  consummated by the third Trading Day following the date of this Agreement;
provided that no such  termination will affect the right of any party to sue for
any breach by the other party (or parties).

      6.2 Fees and Expenses.  At the Closing,  the Company  shall  reimburse the
Lead Investor $30,000 in connection with its diligence and legal fees concerning
the  transactions  contemplated by the Transaction  Documents (the Lead Investor
may deduct such amount from the Investment Amount  deliverable to the Company at
Closing),  it being  understood  that Bryan  Cave LLP,  the  attorneys  for such
Investor,  has not  rendered  any legal  advice to the  Company  or to any other
Investor in connection with the  transactions  contemplated  hereby and that the
Company and each other Investor has relied for such matters on the advice of its
own counsel.  Except as specified in the immediately  preceding  sentence,  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

                                       22
<PAGE>

the  negotiation,  preparation,  execution,  delivery  and  performance  of  the
Transaction  Documents.  The  Company  shall pay all  stamp and other  taxes and
duties levied in connection with the sale of the Securities.

      6.3  Entire  Agreement.  The  Transaction  Documents,  together  with  the
Exhibits and Schedules thereto,  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.

      6.4 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 (a) 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, (b) 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, (c) the Trading Day  following  the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
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:     TNX TELEVISION HOLDINGS, INC.
                             1811 Chestnut Street, Suite 120,
                             Philadelphia, Pennsylvania 19103
                             Attn:  President
                             Facsimile: (215) 972-8183

      With a copy to:        Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
                             666 Third Avenue
                             New York, NY 10017
                             Attention:  Kenneth R. Koch, Esq.
                             Facsimile: (212) 983-3115

      If to an Investor:     To the address set forth under such Investor's name
                             on the signature pages hereof;

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

      6.5 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 the Investors holding a majority of the Shares. 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  subsequent  default  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.

                                       23
<PAGE>

      6.6  Construction.  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. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent,  and no
rules of strict  construction  will be applied against any party. This Agreement
shall be construed as if drafted  jointly by the parties,  and no presumption or
burden of proof shall arise favoring or  disfavoring  any party by virtue of the
authorship  of any  provisions  of  this  Agreement  or  any of the  Transaction
Documents.

      6.7 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 Investors.  Any Investor may assign any
or all of its rights under this  Agreement  to any Person to whom such  Investor
assigns or transfers any Securities,  provided such transferee agrees in writing
to be bound,  with  respect to the  transferred  Securities,  by the  provisions
hereof that apply to the "Investors."  Notwithstanding  anything to the contrary
herein,  Securities may be assigned to any Person in connection with a bona fide
margin  agreement or account or other loan or financing  arrangement  secured by
such Company Securities.

      6.8 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, except that each Related Person is an intended third party
beneficiary  of Section  4.8 and may  enforce  the  provisions  of such  Section
directly against the parties with obligations thereunder.

      6.9 Governing Law. All 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 (except for matters  governed by corporate  law in the State of  Delaware),
without regard to the principles of conflicts of law thereof.  Each party agrees
that all Proceedings concerning the interpretations,  enforcement and defense of
the  transactions  contemplated  by this  Agreement  and any  other  Transaction
Documents (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").  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  (including  with respect to the  enforcement of any of the
Transaction Documents),  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 such 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  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.  Each  party  hereto  hereby

                                       24
<PAGE>

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 Agreement or the transactions  contemplated  hereby.  If either party shall
commence a Proceeding to enforce any provisions of a Transaction Document,  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.

      6.10 Survival. The representations,  warranties,  agreements and covenants
contained herein shall survive the Closing and the delivery and/or conversion or
exercise of the Shares and the Warrants, as applicable.

      6.11   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)  with the same force and effect as if such  facsimile  signature  page
were an original thereof.

      6.12  Severability.  If any  provision  of  this  Agreement  is held to 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
affected or impaired  thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor,  and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

      6.13  Rescission and  Withdrawal  Right.  Notwithstanding  anything to the
contrary  contained in (and  without  limiting  any similar  provisions  of) the
Transaction Documents, whenever any Investor exercises a right, election, demand
or option under a Transaction  Document and the Company does not timely  perform
its related obligations within the periods therein provided,  then such Investor
may rescind or withdraw,  in its sole  discretion from time to time upon written
notice to the Company,  any relevant  notice,  demand or election in whole or in
part without prejudice to its future actions and rights.

      6.14   Replacement  of  Securities.   If  any  certificate  or  instrument
evidencing any Securities is mutilated,  lost, stolen or destroyed,  the Company
shall  issue or cause to be issued in  exchange  and  substitution  for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument,  but only upon receipt of evidence reasonably satisfactory to the
Company  of such  loss,  theft  or  destruction  and  customary  and  reasonable
indemnity,  if requested.  The  applicants  for a new  certificate or instrument
under  such  circumstances  shall  also  pay any  reasonable  third-party  costs
associated with the issuance of such  replacement  Securities.  If a replacement
certificate  or  instrument  evidencing  any  Securities  is requested  due to a
mutilation  thereof,   the  Company  may  require  delivery  of  such  mutilated
certificate  or  instrument  as a  condition  precedent  to  any  issuance  of a
replacement.

      6.15  Remedies.  In  addition to being  entitled  to  exercise  all rights
provided herein or granted by law,  including  recovery of damages,  each of the
Investors  and the Company  will be entitled to specific  performance  under the

                                       25
<PAGE>

Transaction  Documents.  The  parties  agree that  monetary  damages  may not be
adequate  compensation  for  any  loss  incurred  by  reason  of any  breach  of
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.

      6.16 Payment Set Aside.  To the extent that the Company makes a payment or
payments to any  Investor  pursuant to any  Transaction  Document or an Investor
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such  enforcement  or exercise or any part thereof are  subsequently
invalidated,  declared to be fraudulent or  preferential,  set aside,  recovered
from, disgorged by or are required to be refunded,  repaid or otherwise restored
to the  Company,  a  trustee,  receiver  or  any  other  Person  under  any  law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable  cause of action),  then to the extent of any such  restoration
the  obligation  or part thereof  originally  intended to be satisfied  shall be
revived and  continued  in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

      6.17  Independent  Nature  of  Investors'   Obligations  and  Rights.  The
obligations of each Investor under any Transaction  Document are several and not
joint with the  obligations  of any other  Investor,  and no  Investor  shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Investor  under any  Transaction  Document.  The  decision  of each  Investor to
purchase Securities pursuant to the Transaction  Documents has been made by such
Investor independently of any other Investor. Nothing contained herein or in any
Transaction  Document,  and no action  taken by any Investor  pursuant  thereto,
shall be deemed to constitute the Investors as a partnership,  an association, a
joint  venture  or any other kind of entity,  or create a  presumption  that the
Investors  are in any way acting in  concert or as a group with  respect to such
obligations or the transactions  contemplated by the Transaction Documents. Each
Investor  acknowledges  that no other  Investor  has  acted  as  agent  for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such  Investor  in  connection  with  monitoring  its
investment  in the  Securities  or enforcing  its rights  under the  Transaction
Documents.  Each Investor 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  Investor  to be joined as an  additional  party in any
proceeding for such purpose. The Company acknowledges that each of the Investors
has been provided with the same Transaction Documents for the purpose of closing
a  transaction  with  multiple  Investors  and not  because it was  required  or
requested to do so by any Investor.

      6.18  Limitation  of  Liability.  Notwithstanding  anything  herein to the
contrary,  the Company acknowledges and agrees that the liability of an Investor
arising directly or indirectly,  under any Transaction Document of any and every
nature  whatsoever shall be satisfied solely out of the assets of such Investor,
and that no trustee, officer, other investment vehicle or any other Affiliate of
such  Investor or any  investor,  shareholder  or holder of shares of beneficial
interest of such a Investor  shall be personally  liable for any  liabilities of
such Investor.

                                       26
<PAGE>

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                             SIGNATURE PAGES FOLLOW]

                                       27
<PAGE>

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

                                           TNX TELEVISION HOLDINGS, INC.

                                            By:_________________________________
                                                 Name:
                                                 Title:

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                      SIGNATURE PAGES FOR INVESTORS FOLLOW]

                                       28
<PAGE>

      IN WITNESS  WHEREOF,  the parties have  executed  this  Security  Purchase
Agreement as of the date first written above.

                                            NAME OF INVESTING ENTITY:

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

                                            By:  Name:
                                                 Title:

                                            Investment Amount: $
                                                                ----------------

                                            Number of Shares:
                                                               -----------------

                                            Number of Warrants:
                                                                 ---------------

                                            Tax ID No.:
                                                        ------------------------

                                            ADDRESS FOR NOTICE

                                            c/o:
                                                 -------------------------------

                                            Street:
                                                    ----------------------------

                                            City/State/Zip:
                                                            --------------------

                                            Attention:
                                                       -------------------------

                                            Tel:
                                                     ---------------------------

                                            Fax:
                                                     ---------------------------

                                            Email:
                                                     ---------------------------

                                            DELIVERY INSTRUCTIONS
                                            (if different from above)

                                            c/o:
                                                 -------------------------------

                                            Street:
                                                   -----------------------------

                                            City/State/Zip:
                                                            --------------------

                                            Attention:
                                                       -------------------------

                                            Tel:
                                                     ---------------------------

<PAGE>

                                                                       Exhibit A

                            TERMS OF PREFERRED STOCK

<PAGE>

                                                                       Exhibit B

                          REGISTRATION RIGHTS AGREEMENT

<PAGE>

                                                                       Exhibit C

                                 FORM OF WARRANT

<PAGE>

                                                                       Exhibit D

                                ESCROW AGREEMENT

<PAGE>

                                                                       Exhibit E

                     IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

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