Document:

SUBSCRIPTION
      AGREEMENT 

     

    
      	
              Onstream
                Media Corporation

            	
              ___________,
                2007

            
	
              1291
                SW 29th Avenue

            	
              _____________

            
	
              Pompano
                Beach, Florida 33069

            	 

    

    

    Ladies
      and Gentlemen:

    

    The
      undersigned (the “undersigned” or the “Purchaser”) is writing to advise you of
      the following terms and conditions under which the undersigned hereby offers
      to
      subscribe for the securities in this private placement (the “Offering”) offered
      by Onstream Media Corporation, a Florida corporation (the
“Company”).

     

    1. Subscription
      & Closing.

     

    Subject
      to the terms and conditions hereinafter set forth in this Subscription
      Agreement, the undersigned hereby offers to purchase _________ shares of common
      stock, par value $0.0001 (the “Common Stock” or “Securities”), of the Company at
      a price of $2.25 per share, for a total subscription price of $ ________ (the
      “Purchase Price”). The Company will sell on a "best efforts all or none" basis
      $8,000,000 of Securities (the "Minimum
      Offering")
      and up
      to an additional $3,000,000 of Securities on a best efforts basis (the
“Maximum
      Offering”).
      

     

    The
      undersigned shall pay the Purchase Price by wire transfer or check payable
      to
      the order of SunTrust Bank, as escrow agent for the Company, and shall deliver
      the Purchase Price at closing contemporaneously with receipt of the
      certificates. The wire transfer instructions are attached as Exhibit
      D.

     

    The
      closing of the Offering shall take place on the next business day (the
“Acquisition Closing Date”) after notification from the Company to the
      subscriber that the conditions to consummate an acquisition (the "Acquisition")
      (the description of the target is set forth on B) has been satisfied and
      subscriptions have been received for the Minimum Offering). In the event that
      the Company fails to notify the subscriber on or before April 30, 2007,
      which date may be extended by the Company until June 30, 2007, that the
      conditions have been satisfied, the Company will direct the escrow agent to
      return the escrowed funds, without interest, to the subscriber. Notwithstanding
      the foregoing, a Purchaser may fund and complete its purchase prior to the
      closing of the Acquisition; provided that any Purchasers under any of the
      Subscription Agreements who elect this option shall fund and complete the
      purchase on the same date within three (3) days of the date hereof (the “Early
      Closing Date”). Such purchase will be counted towards the Minimum Offering and
      the Company and the Placement Agent shall notify the Escrow Agent to release
      the
      Purchase Price. (The day on which the closing occurs under this Subscription
      Agreement (whether the Acquisition Closing Date or the Early Closing Date)
      is
      the “Closing Date”).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2. Conditions
      to Offer.

     

    The
      Offering is made subject to the following conditions: (i) that the Company
      shall
      have the right to accept or reject this offer, in whole or in part, for any
      reason whatsoever; and (ii) that the undersigned agrees to comply with the
      terms
      of this Subscription Agreement and to execute and deliver any and all further
      documents necessary to complete the transaction.

     

    Acceptance
      of this offer shall be deemed given by the countersigning of this Subscription
      Agreement on behalf of the Company.

     

    3. Representations
      and Warranties of the Undersigned.

     

    The
      undersigned, in order to induce the Company to accept this offer, hereby
      warrants and represents as follows:

     

    (A) The
      undersigned has sufficient liquid assets to sustain a loss of the undersigned's
      entire investment.

     

    (B) The
      undersigned represents that he is an Accredited Investor as that term is defined
      in Regulation D promulgated under the Securities Act of 1933, as amended (the
      "Securities Act"). In general, an "Accredited Investor" is deemed to be an
      institution with assets in excess of $5,000,000 or individuals with net worth
      in
      excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
      with their spouse.

     

    (C) The
      Company has not made any other representations or warranties to the undersigned
      with respect to the Company or rendered any investment advice. 

     

    (D) The
      undersigned has consulted with such independent legal counsel or other advisers
      as the undersigned has deemed appropriate to assist the undersigned in
      evaluating the proposed investment in the Company.

     

    (E) The
      undersigned represents that the undersigned (i) has adequate means of providing
      for the undersigned's current financial needs and possible personal
      contingencies and has no need for liquidity of investment in the Company; (ii)
      can afford (a) to hold unregistered securities for an indefinite period of
      time
      as required; and (b) to sustain a complete loss of the entire amount of the
      subscription; and (iii) has not made an overall commitment to investments which
      are not readily marketable which is disproportionate so as to cause such overall
      commitment to become excessive.

     

    (F) The
      undersigned has been afforded the opportunity to ask questions of, and receive
      answers from the officers and/or directors of the Company acting on its behalf
      concerning the terms and conditions of this transaction and to obtain any
      additional information, to the extent that the Company possesses such
      information or can acquire it without unreasonable effort or expense, necessary
      to verify the accuracy of the information furnished; and has availed himself
      of
      such opportunity to the extent the undersigned considers appropriate in order
      to
      permit the undersigned to evaluate the merits and risks of an investment in
      the
      Company. It is understood that all documents, records and books pertaining
      to
      this investment have been made available for inspection, and that the books
      and
      records of the Company will be available upon reasonable notice for inspection
      by investors during reasonable business hours at its principal place of
      business.

     

    
      
         

      

      
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    (G) The
      undersigned further acknowledges that this Offering has not been passed upon
      or
      the merits thereof endorsed or approved by any state or federal
      authorities.

     

    (H) The
      Securities being subscribed for are being acquired solely for the account of
      the
      undersigned for personal investment and not with a view to, or for resale in
      connection with, any distribution in any jurisdiction where such sale or
      distribution would be precluded. By such representation, the undersigned means
      that no other person has a beneficial interest in the Securities, and that
      no
      other person has furnished or will furnish directly or indirectly, any part
      of
      or guarantee the payment of any part of the consideration to be paid to the
      Company in connection therewith. The undersigned does not intend to dispose
      of
      all or any part of the Securities except in compliance with the provisions
      of
      the Securities Act and applicable state securities laws, and understands that
      the Securities are being offered pursuant to a specific exemption under the
      provisions of the Securities Act, which exemption(s) depends, among other
      things, upon the compliance with the provisions of the Securities
      Act.

     

    (I) The
      undersigned acknowledges that the Company has made available to it copies of
      its
      annual report on Form 10-KSB for the year ended September 30, 2006 and the
      Form 10-QSB for the period ended December 31, 2006.

     

    (J) The
      undersigned hereby agrees that the Company may insert the following or similar
      legend on the face of any certificates evidencing the Securities if required
      in
      compliance with the Securities Act or state securities laws:

     

    "These
      securities have not been registered under the Securities Act of 1933, as amended
      ("Act"), or any state securities laws and may not be sold or otherwise
      transferred or disposed of except pursuant to an effective registration
      statement under the Act and any applicable state securities laws, or an opinion
      of counsel satisfactory to counsel to the issuer that an exemption from
      registration under the Act and any applicable state securities laws is
      available."

     

    The
      undersigned certifies that each of the foregoing representations and warranties
      set forth in subsections (A) through (J) inclusive of this Section 3 are true
      as
      of the date hereof and shall survive such date.

     

    (K) Neither
      the Purchaser nor any person acting on its behalf or at its direction has
      engaged in any purchase or sale of Company common stock (including without
      limitation any short sale, pledge, transfer, establish an open "put equivalent
      position" within the meaning of Rule 16a-1(h) under the Exchange Act) during
      the
      ten (10) trading days immediately preceding the date of this Agreement.

     

    
      
         

      

      
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    4. Representations
      and Warranties of the Company.
      

     

    The
      Company hereby makes the following representations and warranties to the
      Purchaser as of the date hereof. Exceptions to the below, if any, shall be
      set
      forth in a disclosure schedule, attached hereto, each such disclosure schedule
      numbered in accordance with the section and paragraph number below to which
      it
      relates.

     

    (A) Subsidiaries.
      The
      Company has subsidiaries listed on Schedule 4(A) (each subsidiary of the Company
      individually a “Subsidiary”
and
      collectively, “Subsidiaries”).
      All
      capital stock owned by the Company directly or through one or more Subsidiaries
      in each such Subsidiary is validly issued and is fully paid, non-assessable
      and
      free of preemptive rights. 

     

    (B) Organization
      and Qualification.
      Each of
      the Company and its Subsidiaries is an entity duly incorporated or otherwise
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation or organization (as applicable), with the
      requisite power and authority to own and use its properties and assets and
      to
      carry on its business as currently conducted. Neither the Company nor any
      Subsidiary is in violation or default of any of the provisions of its respective
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents. Each of the Company and the Subsidiaries 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
      have or reasonably be expected to result in (i) a material adverse effect on
      the
      legality, validity or enforceability of this Subscription Agreement, (ii) a
      material adverse effect on the results of operations, assets, business, or
      financial condition of the Company and the Subsidiaries, taken as a whole,
      or
      (iii) a material adverse effect on the Company’s ability to perform in any
      material respect on a timely basis its obligations under this Subscription
      Agreement (any of (i), (ii) or (iii), a “Material
      Adverse Effect”)
      and no
      action, claim, suit, to its knowledge, investigation or proceeding (including,
      without limitation, an investigation or partial proceeding, such as a
      deposition), whether commenced or threatened (“Proceeding”)
      has
      been instituted in any such jurisdiction revoking, limiting or curtailing or
      seeking to revoke, limit or curtail such power and authority or qualification.
      

     

    (C) Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the Offering. The execution and delivery of this Subscription
      Agreement by the Company and the consummation by it of the transactions
      contemplated hereby 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, other than the
      Required Approvals (as defined below and as provided in Section 4(G)). This
      Subscription Agreement, when executed and delivered in accordance with the
      terms
      hereof, will constitute the valid and binding obligation of the Company
      enforceable against the Company in accordance with its terms, except (i) as
      limited by applicable bankruptcy, insolvency, reorganization, moratorium and
      other laws of general application affecting enforcement of creditors’ rights
      generally, (ii) as limited by laws relating to the availability of specific
      performance, injunctive relief or other equitable remedies and (iii) insofar
      as
      the indemnification obligations of the Company set forth herein may be limited
      by applicable law or public policy. 

     

    
      
         

      

      
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    (D) No
      Conflicts.
      The
      execution, delivery and performance of this Subscription Agreement by the
      Company and the consummation by the Company of the Offering 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, 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 Subsidiaries’ debt or otherwise) or
      other understanding to which the Company or any of the Subsidiaries is a party
      or by which any property or asset of the Company or its Subsidiaries is bound
      or
      (ii) result in a violation of any law, rule, regulation, order, judgment,
      injunction, decree or other restriction of any court or governmental authority
      as currently in effect to which the Company or either of the Subsidiaries is
      subject (including federal and state securities laws and regulations), or by
      which any property or asset of the Company or any of the Subsidiaries is bound
      or affected; except in the case of clause (ii) (except with respect to federal
      and state securities laws), such as could not, individually or in the aggregate
      (a) adversely affect the legality, validity or enforceability of the Offering
      or
      (b) have or result in or be reasonably likely to have or result in a Material
      Adverse Effect.

     

    (E) Filings,
      Consents and Approvals.
      Neither
      the Company nor any of the Subsidiaries is required to obtain any consent,
      waiver, authorization or order of, give any notice to, or make any filing or
      registration with, any court or other federal, state, local or other
      governmental authority or other Person in connection with the execution,
      delivery and performance by the Company of this Subscription Agreement, other
      than: (i) the filing with the Securities and Exchange Commission (the
“Commission”) of the Registration Statement required by Section 5(A), (ii) the
      filing with the Commission of a Notice on Form D pursuant to Regulation D,
      (iii)
      applicable Blue Sky filings,
      and
      (iv) notification to the NASDAQ Stock Market (collectively,
      the “Required
      Approvals”).

     

    (F) Issuance
      of the Securities.
      The
      Securities are duly authorized and, when issued and paid for in accordance
      with
      this Subscription Agreement, will be duly and validly issued, fully paid and
      nonassessable, free and clear of all liens, and not subject to any preemptive
      rights. 

     

    
      
         

      

      
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    (G) Capitalization.
      The
      number of shares and type of all authorized, issued and outstanding capital
      stock of the Company is as set forth in the SEC Reports (as defined in 4(H)
      below) as of their respective dates. No Person has any right of first refusal,
      preemptive right, right of participation, or any similar right to participate
      in
      the Offering except as set forth on Schedule 4(G). Except as disclosed in the
      SEC Reports, there are no outstanding options, warrants, script rights to
      subscribe to, calls or commitments of any character whatsoever relating to,
      or
      securities, rights or obligations convertible into or exchangeable for, or
      giving any Person or entity any right to subscribe for or acquire, any shares
      of
      Common Stock, or contracts, commitments, understandings or arrangements by
      which
      the Company or any Subsidiary is or may become bound to issue additional shares
      of Common Stock, or securities or rights convertible or exchangeable into shares
      of Common Stock. The issuance and sale of the Securities will not obligate
      the
      Company to issue shares of Common Stock or other securities to any Person (other
      than pursuant to this Offering, including the Company's obligation to issue
      to
      the Placement Agents warrants) and will not result in a right of any holder
      of
      Company securities to adjust the exercise, conversion, exchange or reset price
      under such securities. All of the outstanding shares of capital stock of the
      Company are validly issued, fully paid and nonassessable, have been issued
      in
      compliance with all federal and state securities laws, and none of such
      outstanding shares was issued in violation of any preemptive rights to subscribe
      for or purchase securities. No further approval or authorization of any
      stockholder, the Board of Directors of the Company or others is required for
      the
      issuance and sale of the Securities. Except as described in the SEC Reports,
      there are no stockholders agreements, voting agreements or other similar
      agreements with respect to the Company’s capital stock to which the Company is a
      party or, to the knowledge of the Company, between or among any of the Company’s
      stockholders. To the Company's knowledge, a complete list of stockholders of
      the
      Company that are officers, directors and individuals holding more than 5% of
      the
      outstanding Common Stock is included in the SEC Reports.

     

    (H) SEC
      Reports; Financial Statements.
      The
      Company has filed all reports required to be filed by it under the Securities
      Act and the Securities Exchange Act of 1934, as amended (“Exchange
      Act”),
      including pursuant to Section 13(a) or 15(d) thereof, for the two years
      preceding the date hereof (or such shorter period as the Company was required
      by
      law to file such material) (the foregoing materials being collectively referred
      to herein as the “SEC
      Reports”)
      in
      accordance with the time requirements of the Securities Act and the Exchange
      Act. 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 light of the circumstances under
      which they were made, not misleading. The Company has advised the Purchaser
      that
      a correct and complete copy of each of the SEC Reports (together with all
      exhibits and schedules thereto and as amended to date) is available at
http://www.sec.gov,
      a
      website maintained by the Commission where The Purchaser may view the SEC
      Reports. The financial statements of the Company included in the SEC Reports
      comply in all material respects with applicable accounting requirements and
      the
      rules and regulations of the Commission with respect thereto as in effect at
      the
      time of filing. Such financial statements have been prepared in accordance
      with
      United States generally accepted accounting principles applied on a consistent
      basis during the periods involved (“GAAP”),
      except as may be otherwise specified in such financial statements or the notes
      thereto, and fairly present in all material respects the financial position
      of
      the Company and its consolidated Subsidiaries as of and for the dates thereof
      and the results of operations and cash flows for the periods then
      ended.

     

    
      
         

      

      
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    (I) Material
      Changes.
      Except
      as disclosed in the SEC Reports, since the date of the latest audited financial
      statements included in the SEC Reports: (i) there has been no event, occurrence
      or development that has had a Material Adverse Effect, (ii) the Company has
      not
      incurred any contingent liabilities 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, except as disclosed in the SEC
      Reports (iv) the Company has not declared or made any dividend or distribution
      of cash or other property to its stockholders except in the ordinary course
      of
      business consistent with prior practice, or purchased, redeemed or made any
      agreements to purchase or redeem any shares of its capital stock except
      consistent with prior practice or pursuant to existing Company stock option
      or
      similar plans, and (v) the Company has not issued any equity securities to
      any
      officer or director, except pursuant to existing Company stock option or similar
      plans or as disclosed in the SEC Reports.

     

    (J) Litigation.
      There
      is no action, suit, inquiry, notice of violation, proceeding or investigation
      pending or, to the knowledge of the Company, threatened against or affecting
      the
      Company, the Subsidiaries or any of its properties before or by any court,
      arbitrator, governmental or administrative agency or regulatory authority
      (federal, state, county, local or foreign) (collectively, an “Action”)
      which:
      (i) adversely affects or challenges the legality, validity or enforceability
      of
      this Subscription Agreement or the Securities or (ii) would, if there were
      an
      unfavorable decision, individually or in the aggregate, have or reasonably
      be
      expected to result in a Material Adverse Effect. Neither the Company nor any
      Subsidiary, nor any director or officer thereof in his capacity thereof, is
      or
      has been the subject of any Action involving a claim of violation of or
      liability under federal or state securities laws or a claim of a breach of
      fiduciary duty. The Company does not have pending before the Commission any
      request for confidential treatment of information. 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 Subsidiaries under the Exchange Act or the Securities
      Act.

     

    (K) 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 or any Subsidiary that
      could
      reasonably be expected to result in a Material Adverse Effect.

     

    
      
         

      

      
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    (L) 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, nor does the Company or any
      Subsidiary have any knowledge that a third party is in default under, or is
      in
      violation of, any Material Contracts which are filed as an exhibit to the
      Company’s Annual Report on Form 10-KSB for the year ended September 30, 2006, or
      any other periodic or current report filed by the Company with the Securities
      and Exchange Commission (the “Commission”)
      since
      September 30, 2006 (the “Material
      Contracts”),
      (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 applicable to its business, except in each case as could not have a
      Material Adverse Effect.
      

     

    (M) Permits.
      Except
      for construction, environmental and other permits required to be obtained in
      the
      ordinary course of its business, 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 its business
      as currently conducted, 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 (“Material
      Permits”),
      and
      the Company has not received any notice of proceedings relating to the
      revocation or modification of any Material Permit.

     

    (N) Title
      to Assets.
      The
      Company and the Subsidiaries have good and marketable title in all real and
      personal property owned by them that is material to the business of 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 to
      their knowledge, enforceable leases of which the Company and the Subsidiaries
      are in material compliance except as set forth herein or in the SEC
      Reports.

     

    (O) Patents
      and Trademarks.
      The
      Company and the Subsidiaries have, or have rights to use, all patents, patent
      applications, trademarks, trademark applications, service marks, trade names,
      copyrights, licenses and other similar rights material for use in connection
      with their respective businesses as currently conducted and which the failure
      to
      so have would have a Material Adverse Effect (collectively, the “Intellectual
      Property Rights”).
      Neither the Company nor any Subsidiary has received a written notice that the
      Intellectual Property Rights used by the Company or any Subsidiary violates
      or
      infringes upon the rights of any Person nor to the Company's knowledge is there
      any basis for such a claim. To the knowledge of the Company, all such
      Intellectual Property Rights are enforceable and to its knowledge, there is
      no
      existing infringement by another Person of any of the Intellectual Property
      Rights.

     

    (P) Transactions
      with Affiliates and Employees.
      None of
      the officers or directors of the Company or any Subsidiary and, to the knowledge
      of the Company, none of the employees of the Company or any Subsidiary 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 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, in each case in excess of $60,000 other than (i) for payment of salary
      or consulting fees for services rendered, (ii) for reimbursement for expenses
      incurred on behalf of the Company, (iii) for other employee benefits, including
      stock option agreements under any stock option plan of the Company or (iv)
      as
      otherwise disclosed in the SEC Reports.

     

    
      
         

      

      
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    (Q) Internal
      Accounting Controls.
      Each of
      the Company and the Subsidiaries is in material compliance with all provisions
      of the Sarbanes Oxley Act of 2002 which are presently applicable to it and
      intends to comply with other applicable provisions of the Sarbanes-Oxley Act
      that may become effective and applicable, and the rules and regulations
      promulgated thereunder, upon the effectiveness and applicability of such
      provisions with respect to the Company. Each of the Company and the Subsidiaries
      maintains 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
      GAAP 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 Exchange Act Rules 13a-14 and 15d-14) 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. The Company’s certifying
      officers have evaluated the effectiveness of the Company’s controls and
      procedures as of December 31, 2006 (such date, the “Evaluation
      Date”).
      The
      Company presented in its Quarterly Report on Form 10-QSB for the quarter ended
      December 31, 2006 the conclusions of the certifying officers about the
      effectiveness of the disclosure controls and procedures based on their
      evaluations as of the Evaluation Date. Since the Evaluation Date, there have
      been no changes in the Company’s internal controls (within the meaning of Item
      308 of Regulation S-K under the Exchange Act) that has materially affected,
      or
      is reasonably likely to materially affect, the Company’s internal control over
      financial reporting, except as disclosed in the SEC Reports.

     

    (R) Private
      Placement.
      Assuming the accuracy of the Purchaser representations and warranties set forth
      in Section 3, no registration under the Securities Act is required for the
      offer
      and sale of the Securities by the Company to the Purchasers as contemplated
      hereby. 

     

    (S) Application
      of Takeover Protections.
      Except
      with respect to any limitations which could apply to the Purchaser pursuant
      to
      Sections [607.0901 and 607.0902] under the Florida Business Corporation Act,
      the
      Company and its Board of Directors have 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 Purchasers as a result
      of the Purchasers and the Company fulfilling their obligations or exercising
      their rights under this Subscription Agreement, including without limitation
      as
      a result of the Company’s issuance of the Securities and the Purchaser’s
      ownership of the Securities.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (T) Disclosure.
      To the
      knowledge of the Company, all
      written statements provided to the Purchaser regarding the Company, any of
      its
      Subsidiaries, its business and the transactions contemplated hereby, furnished
      by or on behalf of the Company with respect to the representations and
      warranties made herein are true and correct in all material respects with
      respect to such representations and warranties and do not contain any untrue
      statement of a material fact or omit to state any material fact necessary in
      order to make the statements made therein, in light of the circumstances under
      which they were made, not misleading.
      The
      Company acknowledges and agrees that the Purchaser makes or has made no
      representations or warranties with respect to the transactions contemplated
      hereby other than those specifically set forth in this Subscription Agreement
      (including its Exhibits).

     

    (U) No
      Integrated Offering.
      The
      Company has not made any offers or sales of any security or solicited any offers
      to buy any security, under circumstances that would cause this Offering to
      be
      integrated with prior offerings by the Company for purposes of the Securities
      Act or any applicable shareholder approval provisions in a manner that would
      require the registration under the Securities Act of the Offering or, if then
      listed or quoted on a trading market, that would be integrated with the Offering
      for purposes of the rules and regulations of any trading market. The Company
      does not have any registration statement pending before the Commission or
      currently under the Commission’s review. 

     

    (V) Tax
      Status.
      Except
      for matters that would not, individually or in the aggregate, have or reasonably
      be expected to result in a Material Adverse Effect, the Company and each
      Subsidiary has filed all necessary federal, state and foreign income and
      franchise tax returns and has paid or accrued all taxes shown as due thereon,
      and the Company has no knowledge of a tax deficiency which has been asserted
      or
      threatened against the Company or any Subsidiary.

     

    (W) No
      General Solicitation.
      The
      Company has not offered or sold any of the Securities by any form of general
      solicitation or general advertising. The Company has offered the Securities
      for
      sale only to each Purchaser in the Offering and certain other “accredited
      investors” within the meaning of Rule 501 under the Securities Act.

     

    (X) Foreign
      Corrupt Practices.
      Neither
      the Company, nor to the knowledge of the Company, any agent or other Person
      acting on behalf of the Company, has (i) directly or indirectly, used any
      corrupt funds for unlawful contributions, gifts, entertainment or other unlawful
      expenses related to foreign or domestic political activity, (ii) made any
      unlawful payment to foreign or domestic government officials or employees or
      to
      any foreign or domestic political parties or campaigns from corporate funds,
      (iii) failed to disclose fully any contribution made by the Company (or made
      by
      any Person acting on its behalf of which the Company is aware) which is in
      violation of law, or (iv) violated in any material respect any provision of
      the
      Foreign Corrupt Practices Act of 1977, as amended.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (Y) Accountants.
      The
      Company’s accountants are set forth in the SEC Reports. To the Company’s
      knowledge, such accountants are an independent registered public accounting
      firm
      as required by the Securities Act.

     

    (Z) Indebtedness.
      The SEC
      Reports set forth all outstanding secured and unsecured Indebtedness of the
      Company or any Subsidiary, or for which the Company or any Subsidiary has
      commitments. For the purposes of this Agreement, “Indebtedness”
shall
      mean (a) any liabilities for borrowed money or amounts owed in excess of
      $500,000 (other than trade accounts payable incurred in the ordinary course
      of
      business), (b) all guaranties, endorsements and other contingent obligations
      in
      respect of Indebtedness of others, whether or not the same are or should be
      reflected in the Company’s balance sheet (or the notes thereto), except
      guaranties by endorsement of negotiable instruments for deposit or collection
      or
      similar transactions in the ordinary course of business; and (c) the present
      value of any lease payments
      in excess of $500,000 due under leases required to be capitalized in accordance
      with GAAP. Neither
      the Company nor any Subsidiary is in default with respect to any
      Indebtedness.

     

    (AA) No
      Disagreements with Accountants.
      There
      are no disagreements of any kind presently existing, or reasonably anticipated
      by the Company to arise, between the accountants formerly or presently employed
      by the Company, that would, individually or in the aggregate, have or reasonably
      be expected to result in a Material Adverse Effect.

     

    (BB) Listing
      and Maintenance Requirements.
      The
      Company’s Common Stock currently trades on the Nasdaq Capital Markets. The
      Company is, and has no reason to believe that it will not in the foreseeable
      future continue to be, in compliance with the maintenance requirements necessary
      to maintain trading on the Nasdaq Capital Markets. Except as otherwise disclosed
      in the SEC Reports, the Company has not received any delisting or listing
      inquiry from the Nasdaq Capital Markets in the past twelve (12)
      months.

     

    (CC) DTC
      Status.
      The
      Company’s current transfer agent is a participant in and the Common Stock is
      eligible for transfer pursuant to the Depository Trust Company Automated
      Securities Transfer Program. The current contact information for such transfer
      agent is: Interwest Transfer Company Incorporated, 1981 East 4800 South, Suite
      100, Salt Lake City, Utah 84117. Telephone: (801) 272-9294.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (DD) Independent
      Nature of Purchasers.
      The
      Company acknowledges that the obligations of each Purchaser under the
      Subscription Agreements are several and not joint with the obligations of any
      other Purchaser, and no Purchaser shall be responsible in any way for the
      performance of the obligations of any other Purchaser under the Subscription
      Agreements or other transaction documents. The Subscription Agreements executed
      by each Purchaser are substantially identical. The Company acknowledges that
      the
      decision of each Purchaser to purchase securities pursuant to this Offering
      has
      been made by such Purchaser independently of any other purchase and
      independently of any information, materials, statements or opinions as to the
      business, affairs, operations, assets, properties, liabilities, results of
      operations, condition (financial or otherwise) or prospects of the Company
      or of
      its Subsidiaries which may have made or given by any other Purchaser or by
      any
      agent or employee of any other Purchaser, and no Purchaser or any of its agents
      or employees shall have any liability to any Purchaser (or any other person)
      relating to or arising from any such information, materials, statements or
      opinions. The Company acknowledges that nothing contained herein, or in any
      transaction document, and no action taken by any Purchaser pursuant hereto
      or
      thereto, shall be deemed to constitute the Purchasers as a partnership, an
      association, a joint venture or any other kind of entity, or create a
      presumption that the Purchasers are in any way acting in concert or as a group
      with respect to such obligations or the transactions contemplated by the
      Subscription Agreements. The Company acknowledges that each Purchaser shall
      be
      entitled to independently protect and enforce its rights, including without
      limitation, the rights arising out of this Agreement or out of the other
      transaction documents, and it shall not be necessary for any other Purchaser
      to
      be joined as an additional party in any proceeding for such purpose. The Company
      acknowledges that each Purchaser has retained its own individual counsel with
      respect to the transactions contemplated hereby.  

     

    5. Registration
      Rights.
      

     

    The
      Company grants registration rights to the undersigned under the following terms
      and conditions:

     

    (A) The
      Company shall prepare and file, at its own expense, as soon as reasonably
      practicable and in any event within sixty (60) days of the Closing Date
      hereunder, a registration statement on Form S-3 (except if the Company is not
      then eligible to register for resale the Registrable Securities (as defined
      below) on Form S-3, in which case such registration shall be on another
      appropriate form in accordance herewith and with the Securities Act and the
      rules promulgated thereunder) under the Securities Act (the “Registration
      Statement”)
      with
      the Commission sufficient to permit the non-underwritten public offering and
      resale of all of the Securities sold to the Purchaser hereunder (the
“Registrable
      Securities”)
      through the facilities of all appropriate securities exchanges, if any, on
      which
      the Company’s Common Stock is being sold or on the over-the-counter market if
      the Company’s Common Stock is traded thereon; provided,
      however,
      that
      not less than three (3) business days prior to the filing of the Registration
      Statement or any related prospectus or any amendment or supplement thereto,
      the
      Company shall (i) furnish to the Purchaser copies of all such documents proposed
      to be filed, which documents will be subject to the reasonable review of the
      Purchaser, and (ii) cause its officers and directors, counsel and independent
      certified public accountants to respond to such inquiries as shall be necessary,
      in the reasonable opinion of the Purchaser and its counsel, to conduct a
      reasonable review of such documents. 

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (B) The
      Company will use its reasonable best efforts to cause such Registration
      Statement to become effective as promptly as possible after filing, and in
      any
      event within one hundred twenty (120) days from the Early Closing Date (or
      in
      the event the Registration Statement receives a “full review” by the Commission,
      within one hundred fifty (150) days from the Early Closing Date) or, if earlier,
      within five (5) business days of Commission clearance to request acceleration
      of
      effectiveness. The number of shares designated in the Registration Statement
      to
      be registered shall include all of the Registrable Securities and shall include
      appropriate language regarding reliance upon Rule 416 to the extent permitted
      by
      the Commission. The Company will notify the Purchaser of the date of
      effectiveness of the Registration Statement promptly upon effectiveness. The
      Company shall request that the effective time of the Registration Statement
      be
      4:00 p.m. Eastern Time on the effective date and the Company shall file the
      final prospectus pursuant to Rule 424 of the Securities Act no later than 9:00
      a.m. Eastern Time on the second business day following the date the Registration
      Statement is declared effective by the Commission. In the event that the number
      of shares so registered shall prove to be insufficient to register the resale
      of
      all of the Registrable Securities, then the Company shall be obligated to file,
      within thirty (30) days of notice from any Purchaser, a further Registration
      Statement registering such remaining shares and shall use its reasonable best
      efforts to prosecute such additional Registration Statement to effectiveness
      within ninety (90) days of the date of such notice. With respect to any
      Securities sold on the Early Closing Date, the Company shall not permit any
      securities other than the Registrable Securities, the Securities sold to other
      Purchasers pursuant to a Subscription Agreement on such Early Closing Date
      or
      the Securities described in Section (ii) or (iii) on Exhibit C to be included
      in
      the Registration Statement if the Acquisition Closing Date does not occur.
      With
      respect to any Securities sold on the Acquisition Closing Date, the Company
      shall not permit any securities other than the Registrable Securities, the
      Securities sold to other Purchasers on the Early Closing Date or the Acquisition
      Closing Date or the Securities described in Exhibit C to be included in the
      Registration Statement.

     

    (C) Except
      as
      otherwise provided in Section 5(K)(ii), below, the Company will maintain the
      Registration Statement or post-effective amendment filed under the terms of
      this
      Subscription Agreement effective under the Securities Act until the earlier
      of
      (i) the date that all of the Registrable Securities have been sold pursuant
      to
      such Registration Statement, (ii) all Registrable Securities have been otherwise
      transferred to Persons who may trade such shares without restriction under
      the
      Securities Act, and the Company has delivered a new certificate or other
      evidence of ownership for such securities not bearing a restrictive legend,
      or
      (iii) all Registrable Securities may be sold at any time, without volume or
      manner of sale limitations pursuant to Rule 144(k) or any similar provision
      then
      in effect under the Securities Act in the opinion of counsel to the Company
      (the
“Effectiveness
      Period”).
      The
      Company shall respond
      as promptly as possible to any comments received from the Commission with
      respect to the Registration Statement or any amendment thereto and as promptly
      as possible provide the Purchaser with true and complete copies of all
      correspondence from and to the Commission relating to the Registration Statement
      provided that the Company shall redact therefrom any information that
      constitutes material non-public information.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (D) If,
      at
      any time during which the Registration Statement required by Section 5(A) above
      is not effective, the Company shall not file a registration statement pursuant
      to the Securities Act in connection with the proposed offer and sale of any
      of
      its securities by it or any of its security holders (other than a registration
      statement on Form S-4 that is not related to the Acquisition, or S-8, or other
      successor form) unless the Company shall include the Registrable Securities
      of
      each Purchaser in such Registration Statement in which case the Company may
      make
      such filing.

     

    (E) All
      fees,
      disbursements and out-of-pocket expenses and costs incurred by the Company
      in
      connection with the preparation and filing of the Registration Statement, in
      making filings with NASD or NASDR (including, without limitation, pursuant
      to
      NASD Rule 2710), and in complying with applicable federal securities and Blue
      Sky laws (including, without limitation, all attorneys’ fees of the Company)
      shall be borne by the Company. The Purchaser shall bear the cost of underwriting
      and/or brokerage discounts, fees and commissions, if any, applicable to the
      Registrable Securities being registered, as well as the fees and expenses of
      their counsel. The Company shall use its reasonable best efforts to qualify
      any
      of the Registrable Securities for sale in such states as any Purchaser
      reasonably designates. However, the Company shall not be required to qualify
      in
      any state which will require an escrow or other restriction relating to the
      Company and/or the Purchasers, or which will require the Company to qualify
      to
      do business in such state or require the Company to file therein any general
      consent to service of process. The Company at its expense will supply each
      of
      the Purchasers with one unbound copy of the applicable Registration Statement
      and any prospectus included therein and other related documents.

     

    (F) Certificates
      evidencing the Registrable Securities shall not contain any legend: (i)
      following any sale of such Registrable Securities pursuant to Rule 144 or an
      effective Registration Statement, except as required by applicable law, or
      (ii)
      if such Registrable Securities are eligible for legend removal under Rule
      144(k), or (iii) 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). The Company agrees that following the
      effectiveness of the Registration Statement or at such time as such legend
      is no
      longer required under this Section 5(F) pursuant to an applicable exemption
      from
      registration, it will, no later than three (3) business days following the
      delivery by Purchaser to the Company’s transfer agent of a certificate
      representing Registrable Securities accompanied by appropriate stock power
      or
      other required documentation, as applicable, issued with a restrictive legend
      (such third Business Day, the “Legend
      Removal Date”),
      deliver or cause to be delivered to such Purchaser a certificate representing
      such shares that is free from all restrictive and other legends, in each case
      without charge to the Purchaser. 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 5(F). Without
      limiting the Purchaser’s other legal remedies, the Company shall immediately
      upon demand reimburse the Purchaser for the cost and losses occasioned by any
      buy-in resulting from the Company’s failure to timely deliver unlegended share
      certificates,
      provided Purchaser provides documentation confirming such buy-in was initiated
      by Purchaser’s broker, securities custodian, or other such outside party, and
      not by Purchaser.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    (G) In
      the
      event that (i) the Registration Statement is not filed with the Commission
      within sixty (60) days of the Early Closing Date, (ii) such Registration
      Statement (A) is not declared effective by the Commission by the earlier of
      (a)
      one hundred twenty (120) days (or
      in the
      event the Registration Statement receives a “full review” by the Commission, one
      hundred fifty (150) days)
      from the
      Early Closing Date or (b) five (5) business days after the Company receives
      clearance by the Commission to request effectiveness, or (B) is declared
      effective by the deadline set forth in this Section 5(G)(ii)(A) but does not
      register all of the Registrable Securities; (iii) such Registration Statement
      is
      not maintained as effective by the Company for the Effectiveness Period (except
      as allowed by 5(K)(ii) below), (iv) trading
      in the Common Stock is suspended or if the Common Stock is delisted from the
      Nasdaq Capital Market (or other principal exchange on which the Common Stock
      is
      traded) for any reason for more than five (5) consecutive trading
      days,
      or (v)
      the additional Registration Statement referred to in Section 5(b) is not filed
      within thirty (30) days or declared effective within ninety (90) days as set
      forth therein (each a “Registration
      Default”),
      then
      the Company will pay Purchaser (pro rated on a daily basis), as partial
      compensation for such failure and not as a penalty one and one-half percent
      (1.5%) of the purchase price of the Securities purchased from the Company and
      held by the Purchaser for each month (or portion thereof) until such trading
      is
      no longer suspended (in the case of clause (iv)), until the Registration
      Statement has been filed (in the case of clause (i) and clause (v)), and in
      the
      event of late effectiveness (in case of clause (ii) above) or lapsed
      effectiveness (in the case of clause (iii) above), (regardless of whether one
      or
      more such Registration Defaults are then in existence, but without duplication
      of such partial compensatory payments) until such Registration Statement has
      been declared effective, provided,
      however, that
      in
      no event shall such payments, in the aggregate, exceed ten percent (10%) of
      the
      initial purchase price of the Securities with respect to each Purchaser. Such
      compensatory payments shall be made to the Purchasers in cash,
      no
      later than the fifth business day following the end of each month in which
      a
      Registration Default(s) occurred, provided,
      however,
      that
      the payment of such amounts shall not relieve the Company from its obligations
      to register the Registrable Securities pursuant to this Section 5.

     

    (H) If
      the
      Company does not remit the payment to the Purchaser as set forth in Section
      5(G)
      above, the Company will pay the Purchaser interest at the rate of 12% per annum,
      or the highest rate permitted by law, if less, until such sums have been paid
      in
      full, and reasonable costs of collection, including attorneys’ fees, in addition
      to the liquidated damages. The registration of the Registrable Securities
      pursuant to this provision or payment of such compensatory amounts shall not
      affect or limit the Purchaser’s other rights or remedies as set forth in this
      Subscription Agreement or at law.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    (I) [Intentionally
      omitted.]

     

    (J) At
      all
      times after one (1) year following the Closing Date, the Company
      will use
      its reasonable best efforts to prepare and furnish to Purchaser and make
      publicly available in accordance with Rule 144(c) such information as is
      required for Purchaser to sell the Registrable Securities under Rule 144. The
      Company further covenants that it will take such further action as any holder
      of
      Registrable Securities may reasonably request, all to the extent required from
      time to time to enable such Person to sell such Registrable Securities without
      registration under the Securities Act within the limitation of the exemptions
      provided by Rule 144. 

     

    (K) In
      the
      case of each registration effected by the Company pursuant to any section
      herein, the Company will keep each Purchaser advised in writing as to the
      initiation of each registration and as to the completion thereof and shall
      promptly (and in any event no later than the next business day) notify each
      Purchaser when each such Registration Statement has been declared effective.
      At
      its expense, the Company will:

     

    
      	 	
              (i)

            	
              Prepare
                and file with the Commission such amendments and supplements to such
                registration statement and the prospectus used in connection with
                such
                registration statement as may be necessary to comply with the provisions
                of the Securities Act with respect to a disposition of all securities
                covered by such registration statement;

            

    

     

    
      	 	
              (ii)

            	
              Promptly
                (and in any event no later than one business day) notify the Purchaser
                at
                any time when a prospectus relating thereto is required to be delivered
                under the Securities Act, of the happening of any event as a result
                of
                which the prospectus included in such registration statement, as
                then in
                effect, includes an untrue statement of a material fact or omits
                to state
                a material fact required to be stated therein or necessary to make
                the
                statements therein not misleading or incomplete in light of the
                circumstances then existing, and at the request of the Purchasers,
                prepare
                and furnish to them a reasonable number of copies of a supplement
                or an
                amendment to such prospectus as may be necessary so that, as thereafter
                delivered to the Purchaser, such prospectus shall not include 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 not
                misleading or incomplete in light of the circumstances then existing;
                provided that,
                for not more than (X) fifteen (15) consecutive business days (or
                a total
                of not more than thirty (30) calendar days in any twelve (12) month
                period) and (Y) up to an additional thirty (30) business days (consecutive
                or not) in any twelve (12) month period only if such material information
                relates to a merger or acquisition transaction, the Company may suspend
                the use of a prospectus included in the Registration Statement if,
                in the
                judgment of the Company, it is advisable to suspend use of such prospectus
                due to pending material developments or other events that have not
                yet
                been publicly disclosed and as to which the Company believes public
                disclosure would be detrimental to the Company, or should the Company
                determine that a post-effective amendment to the Registration Statement
                is
                otherwise required (an “Allowed
                Delay”);
                provided,
                further,
                that the Company shall promptly (and in any event no later than one
                business day) (A) notify each Purchaser in writing of the existence
                of any
                facts or circumstances giving rise to an Allowed Delay (but in no
                event,
                without the prior written consent of such Purchaser, shall the Company
                disclose to such Purchaser any facts or circumstances constituting
                material non-public information) and (B) advise each Purchaser in
                writing
                to cease all sales under such registration statement until the termination
                of the Allowed Delay;

            

    

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    
      	 	
              (iii)

            	
              Use
                its commercially reasonable best efforts to prevent the issuance
                of any
                stop order or other suspension of effectiveness of a registration
                statement, and, if such an order is issued, to obtain the withdrawal
                of
                such order at the earliest possible moment and to notify Purchaser
                promptly, (and in any event no later than one business day) (and,
                in the
                event of an underwritten offering, the managing underwriter) of the
                issuance of such order and the resolution
                thereof;

            

    

     

    
      	 	
              (iv)

            	
              If
                NASD Rule 2710 requires any broker-dealer to make a filing prior
                to
                executing a sale of Registrable Securities by an Purchaser, make
                an Issuer
                Filing with the NASD Corporate Financing Department pursuant to NASD
                Rule
                2710 and use its reasonable best efforts to respond within five business
                days to any comments received from NASD in connection
                therewith.

            

    

     

    
      	 	
              (v)

            	
              Otherwise
                use its commercially reasonable best efforts to comply with all applicable
                rules and regulations of the Commission.

            

    

     

    (L) To
      the
      extent the Purchaser includes any Securities in a registration statement
      pursuant to the terms hereof, the Company will indemnify and hold harmless
      the
      Purchaser, its directors,
      officers, shareholders, partners, employees and agents,
      and
      each Person, if any, who controls Purchaser within the meaning of the Securities
      Act (each a “Purchaser Party”), from and against, and will reimburse such
      Purchaser Party with respect to, any and all losses,
      liabilities, obligations, claims, contingencies, damages, costs and expenses,
      including all judgments, amounts paid in settlements, court costs and reasonable
      attorneys’ fees and costs of investigation (collectively, “Losses”) to
      which
      such Purchaser Party may become subject under the Securities Act or otherwise,
      insofar as such Losses arise out of or are based upon any untrue statement
      or
      alleged untrue statement of any material fact contained in such registration
      statement, any prospectus or exhibit contained therein or any amendment or
      supplement thereto, or arise out of or are based upon the omission or alleged
      omission to state therein a material fact required to be stated therein or
      necessary to make the statements therein, in light of the circumstances in
      which
      they were made, not misleading; provided,
      however,
      that
      the Company will not be liable in any such case to the extent that any such
      loss, damage, liability, cost or expense arises out of or is based upon an
      untrue statement or alleged untrue statement or omission or alleged omission
      so
      made in conformity with written information furnished by the Purchaser or any
      such controlling Person in writing specifically for use in the preparation
      thereof.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    (M) To
      the
      extent the Purchaser includes any Securities in a registration statement
      pursuant to the terms hereof, the Purchaser will indemnify and hold harmless
      the
      Company, its directors and officers and any controlling Person from and against,
      and will reimburse the Company, its directors and officers and any controlling
      Person with respect to, any and all loss, damage, liability, cost or expense
      to
      which the Company, its directors and officers or such controlling Person may
      become subject under the Securities Act or otherwise, insofar as such losses,
      damages, liabilities, costs or expenses are caused by any untrue statement
      or
      alleged untrue statement of any material fact contained in such registration
      statement, any prospectus contained therein or any amendment or supplement
      thereto, or arise out of or are based upon the omission or alleged omission
      to
      state therein a material fact required to be stated therein or necessary to
      make
      the statements therein, in light of the circumstances in which they were made,
      not misleading, in each case to the extent, but only to the extent, that such
      untrue statement or alleged untrue statement or omission or alleged omission
      was
      so made in reliance upon and in conformity with written information furnished
      by
      or on behalf of the Purchaser specifically for use in the preparation thereof
      and provided further, that the maximum amount that may be recovered from the
      Purchaser shall be limited to the amount of net proceeds received by the
      Purchaser from the sale of such Securities.

     

    (N) To
      the
      extent any indemnification by an indemnifying party is prohibited or limited
      by
      law, the indemnifying party agrees to make the maximum contribution with respect
      to any amounts for which it would otherwise be liable hereunder to the extent
      permitted by law, provided that (i) no contribution shall be made under
      circumstances where the indemnifying party would not have been liable for
      indemnification pursuant to the provisions hereof, (ii) no seller of securities
      guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
      of
      the Securities Act) shall be entitled to contribution from any seller of
      securities who was not guilty of such fraudulent misrepresentation, and (iii)
      the amount of the contribution together with any other payments made in respect
      of such loss, damage, liability or expense, by any seller of securities shall
      be
      limited to the net amount of proceeds received by such seller from the sale
      of
      such securities.

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    6. Indemnification
      of the Company.

     

    The
      undersigned understands that the securities acquired as a result of the
      subscription right provided in Section 1 hereof are being offered without
      registration under the Securities Act and applicable state securities laws
      and
      in reliance upon the exemption for transactions by the Company not involving
      any
      public offering; that the availability of such exemption is, in part, dependent
      upon the truthfulness and accuracy of the representations made by the
      undersigned in Section 2 hereof herein; that the Company will rely on such
      representations in accepting any subscriptions for the Securities and that
      the
      Company may take such steps as it considers reasonable to verify the accuracy
      and truthfulness of such representations in advance of accepting or rejecting
      the undersigned's subscription. The undersigned agrees to indemnify and hold
      harmless the Company against any damage, loss, expense or cost, including
      reasonable attorneys' fees, sustained as a result of any breach of the
      representation made by the undersigned in Section 2 hereof. The maximum
      aggregate liability of the undersigned pursuant to its indemnification
      obligations under this Section 6 shall not exceed the Purchase Price paid by
      such Purchaser hereunder.

     

    7. Indemnification
      of the Undersigned.

     

    Subject
      to the provisions of this Section 7, the Company will indemnify and hold the
      Purchaser and its directors, officers, shareholders, partners, employees and
      agents (each, an “Purchaser
      Party”)
      harmless from any and all losses, liabilities, obligations, claims,
      contingencies, damages, costs and expenses, including all judgments, amounts
      paid in settlements, court costs and reasonable attorneys’ fees and costs of
      investigation that any such Purchaser Party may suffer or incur as a result
      of
      or relating to (a) any breach of any of the representations, warranties,
      covenants or agreements made by the Company in this Subscription Agreement
      or
      (b) any action instituted against the Purchaser, or its respective Affiliates,
      by any stockholder of the Company who is not an Affiliate of such Purchaser,
      with respect to any of the transactions contemplated by this Subscription
      Agreement (unless such action is based upon a breach of such Purchaser’s
      representation, warranties or covenants under this Subscription Agreement or
      any
      agreements or understandings such Purchaser may have with any such stockholder
      or any violations by the Purchaser of state or federal securities laws or any
      conduct by such Purchaser which constitutes fraud, gross negligence, willful
      misconduct or malfeasance). If any action shall be brought against any Purchaser
      Party in respect of which indemnity may be sought pursuant to this Agreement,
      such Purchaser Party shall promptly notify the Company in writing, and the
      Company shall have the right to assume the defense thereof with counsel of
      its
      own choosing. Any Purchaser Party shall have the right to employ separate
      counsel in any such action and participate in the defense thereof, but the
      fees
      and expenses of such counsel shall be at the expense of such Purchaser Party
      except to the extent that (i) the employment thereof has been specifically
      authorized by the Company in writing, (ii) the Company has failed after a
      reasonable period of time to assume such defense and to employ counsel or (iii)
      in such action there is, in the reasonable written opinion of such separate
      counsel, a material conflict on any material issue between the position of
      the
      Company and the position of such Purchaser Party. The Company will not be liable
      to any Purchaser Party under this Agreement (i) for any settlement by a
      Purchaser Party effected without the Company’s prior written consent, which
      shall not be unreasonably withheld or delayed; or (ii) to the extent, but only
      to the extent that a loss, claim, damage or liability is attributable to any
      Purchaser Party’s breach of any of the representations, warranties, covenants or
      agreements made by the Purchaser in this Subscription Agreement.

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    8. FOR
      FLORIDA RESIDENTS ONLY: EACH FLORIDA RESIDENT WHO SUBSCRIBES FOR THE PURCHASE
      OF
      SECURITIES HEREIN HAS THE RIGHT, PURSUANT TO SECTION 517.061(11)(A)(5) OF THE
      FLORIDA SECURITIES ACT, TO WITHDRAW HIS SUBSCRIPTION FOR THE PURCHASE AND
      RECEIVE A FULL REFUND OF ALL MONIES PAID WITHIN THREE BUSINESS DAYS AFTER THE
      EXECUTION OF THE SUBSCRIPTION AGREEMENT OR PAYMENT FOR THE PURCHASE HAS BEEN
      MADE, WHICHEVER IS LATER. WITHDRAWAL WILL BE WITHOUT ANY FURTHER LIABILITY
      TO
      ANY PERSON. TO ACCOMPLISH THIS WITHDRAWAL, A SUBSCRIBER NEED ONLY SEND A LETTER
      OR TELEGRAM TO THE COMPANY AT THE ADDRESS SET FORTH IN THIS TERM SHEET
      INDICATING HIS INTENTION TO WITHDRAW.

     

    SUCH
      LETTER OR TELEGRAM SHOULD BE SET AND POSTMARKED PRIOR TO THE END OF THE
      AFOREMENTIONED THIRD BUSINESS DAY. IT IS ADVISABLE TO SEND SUCH LETTER BY
      CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ENSURE THAT IT IS RECEIVED AND
      ALSO
      TO EVIDENCE THE TIME IT WAS MAILED. IF THE REQUEST IS MADE ORALLY, IN PERSON
      OR
      BY TELEPHONE TO AN OFFICER OF THE COMPANY, A WRITTEN CONFIRMATION THAT THE
      REQUEST HAS BEEN RECEIVED SHOULD BE REQUESTED.

     

    FOR
      RESIDENTS OF ALL STATES: THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND ARE
      BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
      REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO
      RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
      EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR
      EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO
      BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
      

     

    9. No
      Waiver.

     

    Notwithstanding
      any of the representations, warranties, acknowledgments or agreements made
      herein by the undersigned, the undersigned does not thereby or in any manner
      waive any rights granted to the undersigned under federal or state securities
      laws.

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    10. Revocation.

     

    The
      undersigned agrees that the undersigned shall not cancel, terminate or revoke
      this Subscription Agreement or any agreement of the undersigned made hereunder
      other than as set forth under Section 5 above, and that this Subscription
      Agreement shall survive the death or disability of the undersigned.

     

    11. Termination
      of Subscription Agreement.

     

    If
      the
      Company elects to cancel this Subscription Agreement, provided that it returns
      to the undersigned, without interest and without deduction, all sums paid by
      the
      undersigned, this offer shall be null and void and of no further force and
      effect, and no party shall have any rights against any other party
      hereunder.

     

    12. Eligibility
      to Use Form S-3.

     

    The
      Company currently meets, and will take all commercially reasonable actions
      to
      continue to meet, the "registrant eligibility" requirements set forth in the
      general instructions to Form S-3 applicable to "resale" registrations on
      Form S-3 during the Effectiveness Period (as defined in Section 5(C)
      hereof).

     

    13. Use
      of
      Proceeds.

     

    The
      net
      proceeds from the sale of the Securities hereunder shall be used by the Company
      for general corporate purposes and acquisition and not to redeem any Common
      Stock or securities convertible, exercisable or exchangeable into Common Stock
      or to settle any outstanding litigation.

     

    14. Short
      Sales.
      Purchaser agrees with the Company that the Company will be irreparably harmed
      if
      the Purchaser engages in short sales and similar hedging transactions, therefore
      Purchaser agrees that it will not directly or indirectly make or participate
      in
      any sale of the shares of common stock of the Company, including "short sales"
      as defined in Rule 200 under Regulation SHO, whether or not exempt, until the
      effective date of the Registration Statement covering the Securities purchased
      by such Purchaser hereunder. The Purchaser will not use any of the restricted
      shares acquired pursuant to this Agreement to cover any short position in the
      common stock of the Company if doing so would be in violation of applicable
      securities laws and otherwise will comply with federal securities laws in the
      holding and sale of the Securities.

     

    15. Miscellaneous.

     

    (A) All
      notices or other communications given or made hereunder shall be in writing
      and
      shall be mailed by registered or certified mail, return receipt requested,
      postage prepaid, to the undersigned at the undersigned's address set forth
      below
      and to the Company at the address set forth above.

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    (B) This
      Subscription Agreement constitutes the entire agreement among the parties hereto
      with respect to the subject matter hereof and may be amended only by a writing
      executed by all parties.

     

    (C) The
      provisions of this Subscription Agreement shall survive the execution thereof.
      

     

    (D) This
      Subscription Agreement shall be governed by and construed in accordance with
      the
      domestic laws of the State of Florida without giving effect to any choice or
      conflict of law provision or rule (whether of the State of Florida or any other
      jurisdiction) that would cause the application of the laws of any jurisdiction
      other than the State of Florida. The parties further: (i) agree that any legal
      suit, action or proceeding arising out of or relating to this Subscription
      Agreement shall be instituted exclusively in any Federal or State court of
      competent jurisdiction within the County of Broward, State of Florida, (ii)
      waive any objection that they may have now or hereafter to the venue of any
      such
      suit, action or proceeding, and (iii) irrevocably consent to the in
      personam jurisdiction of any Federal or State court of competent jurisdiction
      within the County of Broward, State of Florida in any such suit, action or
      proceeding. The parties each further agree to accept and acknowledge service
      of
      any and all process which may be served in any such suit, action or proceeding
      in a Federal or State court of competent jurisdiction within the County of
      Broward, State of Florida, and that service of process upon the parties mailed
      by certified mail to their respective addresses shall be deemed in every respect
      effective service of process upon the parties, in any action or
      proceeding.

     

    (E) Notwithstanding
      anything herein to the contrary, the Company has not obtained requisite
      shareholder approval and the Company will not sell or issue such number of
      shares of Common Stock which would in aggregate with shares issued to any
      placement agent or in connection with the proposed acquisition exceed 19.9%
      of
      the number of outstanding shares of Common Stock on the closing day of this
      Subscription Agreement.

     

    16. Certification.

     

    The
      undersigned certifies that the undersigned has read this entire Subscription
      Agreement and that every statement on the undersigned's part made and set forth
      herein is true and complete.

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    SUBSCRIPTION
      PROCEDURE

     

    In
      order
      to subscribe for Securities of the Company, a prospective investor must deliver
      the following items to
      the
      Company at Onstream Media Corporation, 1291 SW 29th
      Avenue,
      Pompano Beach, Florida 33069, Attn: Randy Selman.

     

    A. One
      completed copy of this Subscription Agreement (the "Subscription Agreement")
      with signatures properly executed;

     

    B. One
      completed copy of the Individual Investor Questionnaire (if the investor is
      a
      person), the Corporation Investor Questionnaire (if the investor is a
      corporation) or the Partnership Investor Questionnaire (if the investor is
      a
      partnership), each of which is attached hereto as [Exhibit
      A],
      with
      signatures properly executed; and

     

    C. A
      check
      or wire transfer payable to __________ Bank as Escrow Agent for Onstream Media
      Corporation in the amount of the Purchase Price.

     

    Payment
      made pursuant to this paragraph must be made by check or wire transfer only.
      Investors that desire to make payments by wire transfer may contact the Company
      for further instruction.

     

    All
      subscriptions must be made by the execution and delivery of a Subscription
      Agreement and Investor Questionnaire. Subscriptions are not binding on the
      Company until accepted by the Company. The Company will refuse any subscription
      by giving written notice to the subscriber by personal delivery or first-class
      mail. 

     

     

     

    

 

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the undersigned has executed this Subscription Agreement on
      the
      date his signature has been subscribed and sworn to below.

    

     

    
      	
              Date:
                __________________

            	
              _________________________________

            
	 	
              Signature
                of Investor

            
	 	 
	
              The
                Securities are to be

            	 
	
              issued
                in (check one box):

            	 
	 	 
	
              ____
                individual name

            	
              _________________________________

            
	 	
              Print
                Name of Investor

            
	 	 
	
              ____
                joint tenants with rights

            	
              _________________________________

            
	
                       
                of survivorship

            	
              Print
                Name of Joint Investor (if applicable)

            
	 	 
	
              ____
                tenants in the entirety

            	 
	 	 
	
              ____
                corporation, partnership or trust

            	 
	
                        
                (please submit the “Special Execution

            	 
	
                        
                Page for Subscription by an Entity”)

            	 
	 	 
	
              Number
                of Securities Subscribed for:

            	
              _________________________________

            
	 	 
	
              Amount
                of check enclosed or amount wired:

            	
              $________________________________

            

    

     

    

    
      
        

      

    Accepted
      as of _______________, 2007

    

    ONSTREAM
      MEDIA CORPORATION

    

    

    By: ________________________________

    Name: ______________________________ 

    Its: ________________________________

     

    
      
        

      

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SPECIAL
      EXECUTION PAGE FOR SUBSCRIPTION BY AN ENTITY

     

    (Not
      Applicable To Subscriptions By Individuals)

    

    IN
      WITNESS WHEREOF, subject to acceptance by the Company, the Undersigned has
      completed this Subscription Agreement to evidence its subscription of Securities
      of Onstream Media Corporation this _____ day of ________________,
      2007.

    

    Amount
      of
      Subscription: $__________________

    

    _____
      TRUST

    

    _____
      CORPORATION  (Attach
      certified corporate resolution authorizing signature and a copy of the articles
      of incorporation)

    

    _____
      PARTNERSHIP (Attach
      copy of the partnership agreement)

    

    (Please
      print the following information exactly as you wish it to appear

    on
      the
      Company's records.)

     

     

    
      
        

      

    

    Name
      of
      Subscriber

     

    

      

    

    Address

     

     

    
      
Tax
      Identification Number            Telephone
      Number

    

    The
      Undersigned has full power and authority to execute this Subscription Agreement.
      The investment by the undersigned in the Company contemplated hereby has been
      authorized by all necessary action on the part of the undersigned and is not
      prohibited by the governing documents of the entity.

    

    
      	
              Dated:____________________

            	
              _______________________________________,

            
	 	
              as
                its investment adviser

            
	 	 
	 	 
	 	
              By:
                ____________________________________

            
	 	 
	 	__________________________________
	 	
              Print
                Name and Capacity

            

    

    

     

    
      
         

      

      
        2EXHIBIT
      10.11

    Board
      of
      Director Fees

    

    The
      following table sets forth the director fees for 2006 and 2007: 

    

    
      	 	 	
              2006

            	 	
              2007

            
	
              Annual
                Retainer

            	 	
              $5,000

            	 	
              $5,000

            
	
              Board
                Meetings

            	 	
              $670
                per meeting

            	 	
              $670
                per meeting

            
	
              Audit
                Committee Meetings

            	 	
              $300
                per meeting

            	 	
              $300
                per meeting

            
	
              All
                Other Committee Meetings

            	 	
              $200
                per meeting

            	 	
              $200
                per meeting

            
	
              Chairman’s
                Annual Salary*

            	 	
              N/A

            	 	
              N/A

            
	
              Vice
                Chairman’s Annual Salary*

            	 	
              $5,000

            	 	
              $5,000

            

    

    

    *These
      salaries only apply to independent outside directors; this payment will not
      apply for the Chairman in 2007 as that position is filled by Mark D. Gainer
      who
      also serves as President and Chief Executive Officer of Union National Financial
      Corporation.

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