Document:

Exhibit 4.1

                          SECURITIES PURCHASE AGREEMENT

         This Securities  Purchase  Agreement (this  "Agreement") is dated as of
March 15, 2005 among Knobias, Inc., a Delaware corporation (the "Company"),  and
each  purchaser  identified on the signature  pages hereto (each,  including its
successors and assigns, a "Purchaser" and collectively the "Purchasers").

         WHEREAS,  subject  to the  terms  and  conditions  set  forth  in  this
Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended
(the "Securities Act") and Rule 506 promulgated thereunder,  the Company desires
to issue  and sell to each  Purchaser,  and each  Purchaser,  severally  and not
jointly, desires to purchase from the Company, 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 each Purchaser agrees
as follows:

                                   ARTICLE I.
                                   DEFINITIONS

1.1 Definitions.  In addition to the terms defined  elsewhere in this Agreement:
(a)  capitalized  terms that are not otherwise  defined herein have the meanings
given to such  terms in the Notes (as  defined  herein),  and (b) the  following
terms have the meanings indicated in this Section 1.1:

                  "Action"  shall  have the  meaning  ascribed  to such  term in
Section 3.1(j).

                  "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 under the  Securities  Act. With respect to a
         Purchaser,  any investment fund or managed account that is managed on a
         discretionary  basis by the same  investment  manager as such Purchaser
         will be deemed to be an Affiliate of such Purchaser.

                  "Closing"  means the closing of the  purchase  and sale of the
Securities pursuant to Section 2.1.

                  "Closing   Date"  means  the  Trading  Day  when  all  of  the
         Transaction   Documents   have  been  executed  and  delivered  by  the
         applicable  parties  thereto,  and all conditions  precedent to (i) the
         Purchasers'  obligations  to pay the  Subscription  Amount and (ii) the
         Company's  obligations to deliver the Securities have been satisfied or
         waived.

                   "Commission" means the Securities and Exchange Commission.

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                  "Common  Stock" means the common stock of the Company,  no par
         value,   and  any  securities   into  which  such  common  stock  shall
         hereinafter have been reclassified into.

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

                  "Company Counsel" means Watkins & Eager PLLC.

                  "Disclosure Schedules" shall have the meaning ascribed to such
         term in Section 3.1 hereof.

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

                  "GAAP" shall have the meaning ascribed to such term in Section
         3.1(h) hereof.

                  "KW" means Keith Wellner,  attorney for DCOFI Master LDC, with
         offices at 830 Third Avenue, New York, New York 10022.

                  "Liens" means a lien, charge, security interest,  encumbrance,
         right of first refusal, preemptive right or other restriction.

                  "Material  Adverse Effect" shall have the meaning  assigned to
         such term in Section 3.1(b) hereof.

                  "Material  Permits"  shall have the  meaning  ascribed to such
         term in Section 3.1(m).

                  "Notes" means, the 12% Senior Subordinated  Secured Notes due,
         subject to the terms therein,  September 1, 2006, issued by the Company
         to the Purchasers hereunder, in the form of Exhibit A.

                   "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.

                  "Registration  Rights Agreement" means the Registration Rights
         Agreement, dated the date hereof, among the Company and the Purchasers,
         in the form of Exhibit B attached hereto.

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                  "Required  Approvals"  shall have the meaning ascribed to such
         term in Section 3.1(e).

                  "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" shall have the meaning  ascribed to such term in
         Section 3.1(h) hereof.

                  "Securities"  means the Notes, the Shares,  the Warrants,  and
         the Warrant Shares.

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

                  "Security  Agreement" means the Security Agreement,  dated the
         date  hereof,  among the  Company  and the  Purchasers,  in the form of
         Exhibit B attached hereto.

                  "Security  Documents"  means the  Security  Agreement  and any
         other  documents and filing  required  thereunder in order to grant the
         Purchasers  a perfected  security  interest in all of the assets of the
         Company, including all UCC-1 filing receipts.

                  "Shares"  means  100,000  shares of  registered  Common  Stock
         issuable to the Purchasers pursuant to the terms of this Agreement.

                  "Subscription  Amount"  means,  as  to  each  Purchaser,   the
         aggregate amount to be paid for Notes purchased  hereunder as specified
         below such Purchaser's name on the signature page of this Agreement and
         next to the heading "Subscription Amount", in United States Dollars and
         in immediately available funds.

                  "Subsidiary"  means any subsidiary of the Company as set forth
         on Schedule 3.1(a).

                  "Trading  Day" means a day on which the Common Stock is traded
         on a Trading Market.

                  "Trading  Market" means the following  markets or exchanges on
         which the Common  Stock is listed or quoted for  trading on the date in
         question:  the Nasdaq SmallCap Market, the American Stock Exchange, the
         New York Stock Exchange, the Nasdaq National Market or the OTC Bulletin
         Board.

                   "Transaction Documents" means this Agreement,  the Notes, the
         Security  Agreement and any other  documents or agreements  executed in
         connection with the transactions contemplated hereunder.

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                  "Warrants"  means   collectively  the  Common  Stock  purchase
         warrants,  in the form of Exhibit C delivered to the  Purchasers at the
         Closing in accordance with Section 2.2(a) hereof,  which Warrants shall
         be  exercisable  immediately  and have a term of exercise equal to five
         years.

                  "Warrant  Shares"  means the shares of Common  Stock  issuable
         upon exercise of the Warrants.

                                  ARTICLE II.
                                PURCHASE AND SALE

         2.1  Closing.  On the Closing  Date,  upon the terms and subject to the
conditions set forth herein,  concurrent with the execution and delivery of this
Agreement by the parties hereto,  the Company agrees to sell, and each Purchaser
agrees to purchase,  $550,000 principal amount of the Notes. The Notes are being
exchanged for the Company's 12% Senior Subordinated Notes due June 15, 2005 (the
"June 2005 Notes"). The Company shall deliver to each Purchaser their respective
Note as determined  pursuant to Section  2.2(a) and the other items set forth in
Section 2.2 issuable at the Closing.  Upon  satisfaction  of the  conditions set
forth in Section 2.2, the Closing shall occur at the offices of the Company,  or
such other location as the parties shall mutually agree.

         2.2 Deliveries.

                  a)       On the Closing Date, the Company shall deliver to the
                           counsel  for such  Purchasers  with  respect  to each
                           Purchaser the following:

                           (i)      this Agreement duly executed by the Company;

                           (ii)     a Note with a principal amount equal to such
                                    Purchaser's Subscription Amount, registered
                                    in the name of such Purchaser;

                           (iii)    the Warrants duly executed by the Company;

                           (iv)     the Shares;

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

                           (vi)     the Security Agreement, duly executed by the
                                    Company,   along   with  all  the   Security
                                    Documents; and

                           (vii)    a legal opinion of Company Counsel.

                  b)       On the Closing Date,  each Purchaser shall deliver or
                           cause  to  be  delivered   to  Company   Counsel  the
                           following:

                           (i)      this   Agreement   duly   executed  by  such
                                    Purchaser;

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                           (ii)     the original June 15, 2005 Notes; and

                           (iii)    the  Security  Agreement,  duly  executed by
                                    such Purchaser.

         2.3 Closing Conditions.

                  a)       The   obligations   of  the  Company   hereunder   in
                           connection  with  the  Closing  are  subject  to  the
                           following conditions being met:

                           (i)      the accuracy in all material  respects  when
                                    made  and  on  the   Closing   Date  of  the
                                    representations   and   warranties   of  the
                                    Purchasers contained herein;

                           (ii)     all obligations, covenants and agreements of
                                    the  Purchasers  required to be performed at
                                    or prior to the Closing Date shall have been
                                    performed; and

                           (iii)    the delivery by the  Purchasers of the items
                                    set   forth  in   Section   2.2(b)  of  this
                                    Agreement.

                  b)       The   respective   obligations   of  the   Purchasers
                           hereunder in connection  with the Closing are subject
                           to the following conditions being met:

                           (i)      the accuracy in all material respects on the
                                    Closing  Date  of  the  representations  and
                                    warranties of the Company contained herein;

                           (ii)     all obligations, covenants and agreements of
                                    the Company  required to be  performed at or
                                    prior to the  Closing  Date  shall have been
                                    performed;

                           (iii)    the delivery by the Company of the items set
                                    forth in Section 2.2(a) of this Agreement;

                           (iv)     there  shall have been no  Material  Adverse
                                    Effect with respect to the Company since the
                                    date hereof; and

                           (v)      from the date  hereof to the  Closing  Date,
                                    trading in the Common  Stock  shall not have
                                    been suspended by the Commission (except for
                                    any   suspension   of   trading  of  limited
                                    duration  agreed  to by the  Company,  which
                                    suspension  shall be terminated prior to the
                                    Closing),  and,  at any  time  prior  to the
                                    Closing   Date,    trading   in   securities
                                    generally as reported by Bloomberg Financial
                                    Markets  shall  not have been  suspended  or
                                    limited,  or minimum  prices  shall not have
                                    been  established on securities whose trades
                                    are  reported  by  such  service,  or on any
                                    Trading   Market,   nor   shall  a   banking
                                    moratorium  have been declared either by the
                                    United States or New York State  authorities

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                                    nor shall there have  occurred  any material
                                    outbreak or  escalation  of  hostilities  or
                                    other national or international  calamity of
                                    such  magnitude  in its  effect  on,  or any
                                    material  adverse  change in, any  financial
                                    market   which,   in  each   case,   in  the
                                    reasonable judgment of each Purchaser, makes
                                    it  impracticable or inadvisable to purchase
                                    the Notes at the Closing.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

         3.1 Representations and Warranties of the Company.  Except as set forth
in the Company's Form 8-K filed with the  Securities and Exchange  Commission on
November 19, 2004__ and  delivered to the  Purchasers  concurrently  herewith as
Schedule 3.1 (the  "Disclosure  Schedule")  which  Disclosure  Schedule shall be
deemed a part hereof, on the date hereof and on the Subsequent Closing Date, the
Company hereby makes the  representations and warranties set forth below to each
Purchaser.

                  (a) Subsidiaries.  All of the direct and indirect subsidiaries
         of the Company are set forth in Item 2.01 of the  Disclosure  Schedule.
         The Company owns,  directly or indirectly,  all of the capital stock or
         other equity  interests of each Subsidiary free and clear of any Liens,
         and all the issued  and  outstanding  shares of  capital  stock of each
         Subsidiary  are validly issued and are fully paid,  non-assessable  and
         free of  preemptive  and similar  rights to  subscribe  for or purchase
         securities. If the Company has no subsidiaries,  then references in the
         Transaction Documents to the Subsidiaries will be disregarded.

                  (b)  Organization and  Qualification.  Each of the Company and
         the Subsidiaries is an entity duly incorporated or otherwise organized,
         validly   existing  and  in  good  standing   under  the  laws  of  the
         jurisdiction of its incorporation or organization (as applicable), with
         the  requisite  power and authority to own and use its  properties  and
         assets and to carry on its business as currently conducted. 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 any
         Transaction Document,  (ii) a material adverse effect on the results of
         operations,  assets, business,  prospects 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  any  Transaction
         Document (any of (i), (ii) or (iii), a "Material  Adverse  Effect") and
         no 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.

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<PAGE>

                  (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  thereunder.  The execution and
         delivery of each of the  Transaction  Documents  by the Company and the
         consummation by it of the transactions  contemplated  thereby have been
         duly authorized by all necessary  action on the part of the Company and
         no further  action is required by the Company in  connection  therewith
         other than in connection with the Required Approvals.  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  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 and (ii) as limited by laws relating to
         the availability of specific  performance,  injunctive  relief or other
         equitable remedies.

                  (d) No Conflicts.  The execution,  delivery and performance of
         the  Transaction  Documents by the Company and the  consummation by the
         Company of the other transactions  contemplated thereby do not and will
         not: (i) conflict with or violate any provision of the Company's or any
         Subsidiary's certificate or articles of incorporation,  bylaws or other
         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,  result in the creation of any Lien
         upon any of the properties or assets of the Company or any  Subsidiary,
         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  (with
         the  exception of the 8%  Convertible  Notes (as herein  defined)),  or
         (iii) subject to the Required  Approvals,  conflict with or 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 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)  filings
         required  pursuant to Section 4.6, (ii) the filing with the  Commission
         of the Registration  Statement,  (iii) the notice and/or application(s)
         to each  applicable  Trading  Market for the  issuance  and sale of the
         Notes for trading thereon in the time and manner  required  thereby and
         (iv) the filing of Form D with the  Commission  and such filings as are
         required   to  be  made  under   applicable   state   securities   laws
         (collectively, the "Required Approvals").

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                  (f)  Issuance  of the  Securities.  The  Securities  are  duly
         authorized  and,  when  issued  and  paid  for in  accordance  with the
         applicable  Transaction  Documents,  will be duly and  validly  issued,
         fully paid and  nonassessable,  free and clear of all Liens  imposed by
         the Company  other than  restrictions  on transfer  provided for in the
         Transaction Documents. The Company has not, and to the knowledge of the
         Company,  no  Affiliate  of the Company  has sold,  offered for sale or
         solicited  offers to buy or  otherwise  negotiated  in  respect  of any
         security (as defined in Section 2 of the Securities  Act) that would be
         integrated  with the offer or sale of the  Securities  in a manner that
         would require the registration  under the Securities Act of the sale of
         the Securities to the Purchasers,  or that would be integrated with the
         offer  or  sale  of  the  Securities  for  purposes  of the  rules  and
         regulations of any Trading Market.

                  (g)  Capitalization.  The  capitalization of the Company is as
         set forth in Item 2.01, the  Description  of Securities  section of the
         Disclosure Schedule. The Company has not issued any capital stock since
         November  15,  2004,  other than  pursuant to the  exercise of employee
         stock options under the Company's  stock option plans,  the issuance of
         shares of Common Stock to employees  pursuant to the Company's employee
         stock  purchase  plan and  pursuant  to the  conversion  or exercise of
         outstanding Common Stock Equivalents.  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 set forth in Item  2.01 and the  Description  of
         Securities  section  of the  Disclosure  Schedule,  as a result  of the
         purchase and sale of the Securities,  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 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 the  Purchasers)  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 or
         similar  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. 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.

                  (h) SEC Reports;  Financial Statements.  The Company has filed
         all reports required to be filed by it under the Securities Act and the
         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,  including the exhibits thereto, being collectively referred

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         to herein as the "SEC  Reports")  on a timely  basis or has  received 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
         light of the circumstances  under which they were made, not misleading.
         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 except that  unaudited  financial
         statements  may not contain all footnotes  required by GAAP, and fairly
         present in all material respects the financial  position of the Company
         and its  consolidated  subsidiaries as of and for the dates thereof and
         the results of  operations  and cash flows for the periods  then ended,
         subject, in the case of unaudited  statements,  to normal,  immaterial,
         year-end audit adjustments.

                  (i)  Material  Changes.  Since the date of the latest  audited
         financial  statements  included  within  the  SEC  Reports,  except  as
         specifically disclosed in 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,  (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 and
         (v) the Company has not issued any equity  securities  to any  officer,
         director or Affiliate, except pursuant to existing Company stock option
         plans.  The Company does not have  pending  before the  Commission  any
         request for confidential treatment of information.

                  (j)  Litigation.  Other  than as set  forth in the  Disclosure
         Schedule  under the caption  "Legal  Proceedings,"  there is no action,
         suit, inquiry, notice of violation, proceeding or investigation pending
         or, to the  knowledge of the Company,  threatened  against or affecting
         the  Company,  any  Subsidiary  or any of their  respective  properties
         before or by any  court,  arbitrator,  governmental  or  administrative
         agency  or  regulatory  authority  (federal,  state,  county,  local or
         foreign)  (collectively,  an "Action")  which (i) adversely  affects or
         challenges  the  legality,  validity  or  enforceability  of any of the
         Transaction Documents or the Securities or (ii) could, if there were an
         unfavorable  decision,  have or  reasonably  be expected to result in a
         Material  Adverse Effect.  Neither the Company nor any Subsidiary,  nor

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         any  director  or officer  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 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.

                  (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  which could  reasonably be expected to result
         in a Material Adverse Effect.

                  (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, any  indenture,  loan or
         credit  agreement or any other agreement or instrument to which it is a
         party or by which it or any of its  properties is bound (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)  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 could not
         have or reasonably be expected to result in a Material  Adverse  Effect
         ("Material  Permits"),  and neither the Company nor any  Subsidiary has
         received  any  notice of  proceedings  relating  to the  revocation  or
         modification of any Material Permit.

                  (n)  Title  to  Assets.  Other  than  the  assets  pledged  in
         connection with the Company's 8% Secured Convertible Notes due November
         1, 2006 (the "8% Convertible  Notes"), the Company and the Subsidiaries
         have good and marketable title in fee simple to all real property owned
         by  them  that is  material  to the  business  of the  Company  and the
         Subsidiaries  and good and  marketable  title in all personal  property
         owned by them that is material  to the  business of the Company and the
         Subsidiaries,  in each  case free and clear of all  Liens,  except  for
         Liens as do not materially affect the value of such property and do not
         materially  interfere with the use made and proposed to be made of such
         property by the Company and the  Subsidiaries and Liens for the payment
         of  federal,  state or other  taxes,  the  payment  of which is neither
         delinquent  nor subject to penalties.  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.

                                       10
<PAGE>

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

                  (p) 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,
         including,  but  not  limited  to,  directors  and  officers  insurance
         coverage at least equal to the aggregate  Subscription  Amount.  To the
         best of Company's knowledge,  such insurance contracts and policies are
         accurate and complete.  Neither the Company nor any  Subsidiary has any
         reason  to  believe  that it will  not be able to  renew  its  existing
         insurance  coverage  as and when  such  coverage  expires  or to obtain
         similar  coverage from similar insurers as may be necessary to continue
         its business without a significant increase in cost.

                  (q) Transactions With Affiliates and Employees.  Except as set
         forth in the SEC  Reports,  none of the  officers or  directors  of the
         Company and, to the knowledge 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 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 $50,000 other
         than  (i) for  payment  of  salary  or  consulting  fees  for  services
         rendered,  (ii)  reimbursement  for expenses  incurred on behalf of the
         Company and (iii) for other employee  benefits,  including stock option
         agreements under any stock option plan of the Company.

                  (r) Sarbanes-Oxley;  Internal Accounting Controls. The Company
         is in material compliance with all provisions of the Sarbanes-Oxley Act
         of 2002 which are  applicable to it as of the Closing Date. 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 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-15(e) and

                                       11
<PAGE>

         15d-15(e))  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,  particularly  during the period in which
         the Company's most recently  filed  periodic  report under the Exchange
         Act, as the case may be, is being  prepared.  The Company's  certifying
         officers have evaluated the effectiveness of the Company's controls and
         procedures as of the date prior to the filing date of the most recently
         filed   periodic   report  under  the  Exchange  Act  (such  date,  the
         "Evaluation  Date").  Since the  Evaluation  Date,  there  have been no
         significant changes in the Company's internal controls (as such term is
         defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to
         the  Company's  knowledge,  in other  factors that could  significantly
         affect the Company's internal controls.

                  (s) Certain Fees. 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 Purchasers shall have no obligation with respect to any
         fees or with  respect  to any  claims  made by or on  behalf  of  other
         Persons for fees of a type contemplated in this Section that may be due
         in connection with the transactions contemplated by this Agreement.

                  (t) Private Placement. Assuming the accuracy of the Purchasers
         representations   and   warranties   set  forth  in  Section   3.2,  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.  The issuance  and sale of the  Securities  hereunder  does not
         contravene the rules and regulations of the Trading Market.

                  (u)  Investment  Company.  The  Company is not,  and is not an
         Affiliate  of,  and  immediately  after  receipt  of  payment  for  the
         Securities,  will not be or be an Affiliate of, an "investment company"
         within the meaning of the  Investment  Company Act of 1940, as amended.
         The Company  shall conduct its business in a manner so that it will not
         become subject to the Investment Company Act.

                  (v) Registration  Rights. With the exception of the holders of
         the Company's 8% Convertible  Notes,  Series A Preferred  Stock and the
         investor under the Standby Equity  Agreement  between  Cornell  Capital
         Partners,  LP,  and the  Company,  no Person has any right to cause the
         Company  to effect the  registration  under the  Securities  Act of any
         securities of the Company.

                  (w) Listing and Maintenance Requirements. The Company's Common
         Stock is registered  pursuant to Section 12(g) of the Exchange Act, and
         the Company has taken no action  designed to, or which to its knowledge
         is likely to have the effect of,  terminating  the  registration of the
         Common Stock under the  Exchange  Act nor has the Company  received any
         notification  that the  Commission is  contemplating  terminating  such
         registration.  The Company has not, in the 12 months preceding the date

                                       12
<PAGE>

         hereof,  received  notice from any  Trading  Market on which the Common
         Stock is or has been listed or quoted to the effect that the Company is
         not in compliance with the listing or maintenance  requirements of such
         Trading  Market.  The Company is, and has no reason to believe  that it
         will not in the  foreseeable  future continue to be, in compliance with
         all such listing and maintenance requirements.

                  (x) Application of Takeover  Protections.  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 the  Transaction
         Documents,  including  without  limitation as a result of the Company's
         issuance  of  the  Securities  and  the  Purchasers'  ownership  of the
         Securities.

                  (y) Disclosure.  The Company  confirms that neither it nor any
         other Person acting on its behalf has provided any of the Purchasers or
         their agents or counsel with any information  that constitutes or might
         constitute material, nonpublic information. The Company understands and
         confirms that the Purchasers will rely on the foregoing representations
         and covenants in effecting  transactions  in securities of the Company.
         All disclosure  provided to the Purchasers  regarding the Company,  its
         business  and  the  transactions  contemplated  hereby,  including  the
         Disclosure  Schedules to this  Agreement,  furnished by or on behalf of
         the Company with respect to the  representations  and  warranties  made
         herein are true and correct  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 no
         Purchaser  makes or has made any  representations  or  warranties  with
         respect  to the  transactions  contemplated  hereby  other  than  those
         specifically set forth in Section 3.2 hereof.

                  (z) No  Integrated  Offering.  Assuming  the  accuracy  of the
         Purchasers'  representations  and  warranties set forth in Section 3.2,
         neither the Company,  nor any of its affiliates,  nor any Person acting
         on its or their behalf has, directly or indirectly,  made any offers or
         sales of any  security  or  solicited  any offers to buy any  security,
         under circumstances that would cause this offering of the Securities to
         be integrated  with prior  offerings by the Company for purposes of the
         Securities  Act  or any  applicable  shareholder  approval  provisions,
         including,  without limitation,  under the rules and regulations of any
         exchange or automated  quotation  system on which any of the securities
         of the Company are listed or designated.

                  (aa) Solvency. Based on the financial condition of the Company
         as of the  Closing  Date  after  giving  effect to the  receipt  by the
         Company of the proceeds from the sale of the Securities hereunder,  (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

                                       13
<PAGE>

         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). The Company has no
         knowledge of any facts or  circumstances  which lead it to believe that
         it will file for  reorganization or liquidation under the bankruptcy or
         reorganization  laws of any  jurisdiction  within  one  year  from  the
         Closing  Date.  The SEC Reports  set forth as of the dates  thereof 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 $50,000
         (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  $50,000  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.

                  (bb)  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.

                  (cc) No General  Solicitation.  Neither  the  Company  nor any
         person  acting on behalf of the  Company has 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 the Purchasers
         and certain other "accredited investors" within the meaning of Rule 501
         under the Securities Act.

                  (dd) 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

                                       14
<PAGE>

         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

                  (ee)  Accountants.  The  Company's  accountants  are Horne CPA
         Group. To the Company's  knowledge,  such accountants,  who the Company
         expects  will  express  their  opinion  with  respect to the  financial
         statements to be included in the Company's Annual Report on Form 10-KSB
         for  the  year  ending  December  31,  2004,  are a  registered  public
         accounting firm as required by the Securities Act.

                  (ff)  Seniority.  As of the  Closing  Date,  other than the 8%
         Convertible  Notes of the Company,  no  indebtedness or other equity of
         the  Company  is senior to or pari  passu  with,  the Notes in right of
         payment,  whether  with  respect to  interest  or upon  liquidation  or
         dissolution,  or otherwise, other than indebtedness secured by purchase
         money security  interests (which is senior only as to underlying assets
         covered thereby) and capital lease obligations (which is senior only as
         to the property covered thereby).

                  (gg) No Disagreements with Accountants and Lawyers.  There are
         no  disagreements  of  any  kind  presently  existing,   or  reasonably
         anticipated  by the  Company  to arise,  between  the  accountants  and
         lawyers  formerly or presently  employed by the Company and the Company
         is  current  with  respect  to any  fees  owed to its  accountants  and
         lawyers.  By making this  representation  the Company  does not, in any
         manner,  waive the attorney/client  privilege or the confidentiality of
         the communications between the Company and its lawyers.

                  (hh)   Acknowledgment   Regarding   Purchasers'   Purchase  of
         Securities.  The  Company  acknowledges  and  agrees  that  each of the
         Purchasers  is  acting  solely  in  the  capacity  of an  arm's  length
         purchaser   with  respect  to  the   Transaction   Documents   and  the
         transactions contemplated hereby. The Company further acknowledges that
         no  Purchaser  is acting as a  financial  advisor or  fiduciary  of the
         Company (or in any similar capacity) with respect to this Agreement and
         the  transactions  contemplated  hereby  and any  advice  given  by any
         Purchaser  or any of their  respective  representatives  or  agents  in
         connection with this Agreement and the transactions contemplated hereby
         is merely incidental to the Purchasers' purchase of the Securities. The
         Company  further  represents  to  each  Purchaser  that  the  Company's
         decision  to enter into this  Agreement  has been  based  solely on the
         independent  evaluation of the transactions  contemplated hereby by the
         Company and its representatives.  The Company further acknowledges that
         in  addition  to  purchasing   Securities,   the  Purchasers  or  their
         affiliates may directly or indirectly own debt (including the Company's
         8% Convertible Notes),  Common Stock and Preferred Stock in the Company
         and that such parties,  exercising their rights hereunder may adversely
         impact their other  holdings as well as the other equity holders in the
         Company.

         3.2  Representations  and Warranties of the Purchasers.  Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:

                                       15
<PAGE>

                  (a) Organization;  Authority. Such Purchaser is an entity duly
         organized,  validly existing and in good standing under the laws of the
         jurisdiction  of  its  organization  with  full  right,   corporate  or
         partnership  power and  authority to enter into and to  consummate  the
         transactions contemplated by the Transaction Documents and otherwise to
         carry out its  obligations  thereunder.  The  execution,  delivery  and
         performance by such Purchaser of the transactions  contemplated by this
         Agreement  have been duly  authorized  by all  necessary  corporate  or
         similar action on the part of such Purchaser. Each Transaction Document
         to which it is a party has been duly  executed by such  Purchaser,  and
         when delivered by such  Purchaser in accordance  with the terms hereof,
         will  constitute  the  valid and  legally  binding  obligation  of such
         Purchaser,  enforceable against it in accordance with its terms, except
         (i)  as  limited  by  general   equitable   principles  and  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  indemnification  and  contribution  provisions may be
         limited by applicable law.

                  (b) Purchaser Representation.  Such Purchaser understands that
         the Securities are "restricted securities" and have not been registered
         under the Securities Act or any applicable  state securities law and is
         acquiring the  Securities as principal for its own account and not with
         a view to or for  distributing or reselling such Securities or any part
         thereof,   has  no  present  intention  of  distributing  any  of  such
         Securities  and has no  arrangement  or  understanding  with any  other
         persons  regarding the distribution of such Securities.  Such Purchaser
         is acquiring  the  Securities  hereunder in the ordinary  course of its
         business.  Such Purchaser does not have any agreement or understanding,
         directly  or  indirectly,  with any  Person  to  distribute  any of the
         Securities.

                  (c) Purchaser  Status.  At the time such Purchaser was offered
         the  Securities,  it was, and at the date hereof it is, and on the date
         on which it purchases the Notes, it will be either:  (i) an "accredited
         investor"  as  defined in Rule  501(a)(1),  (a)(2),  (a)(3),  (a)(7) or
         (a)(8)  under the  Securities  Act or (ii) a  "qualified  institutional
         buyer" as  defined  in Rule  144A(a)  under the  Securities  Act.  Such
         Purchaser is not required to be  registered  as a  broker-dealer  under
         Section 15 of the Exchange Act.

                  (d) Experience of Such Purchaser. Such Purchaser, either alone
         or   together   with   its   representatives,   has   such   knowledge,
         sophistication  and experience in business and financial  matters so as
         to be capable  of  evaluating  the merits and risks of the  prospective
         investment in the Securities, and has so evaluated the merits and risks
         of such investment. Such Purchaser is able to bear the economic risk of
         an  investment in the  Securities  and, at the present time, is able to
         afford a complete loss of such investment.

                  (e) General Solicitation. Such Purchaser 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.

                                       16
<PAGE>

                  The Company  acknowledges  and agrees that each Purchaser does
         not make or has not made 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 Transfer Restrictions.

                  (a) The Securities may only be disposed of in compliance  with
         state and federal  securities  laws. In connection with any transfer of
         Securities other than pursuant to an effective  registration  statement
         or Rule 144, to the  Company or to an  affiliate  of a Purchaser  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 and reasonably  acceptable to the
         Company,  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. As a condition of transfer,  any such transferee  shall
         agree in writing to be bound by the terms of this  Agreement  and shall
         have the rights of a Purchaser under this Agreement.

                  (b) The  Purchasers  agree  to the  imprinting,  so long as is
         required by this Section  4.1(b),  of a legend on any of the Securities
         in the following form:

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

                  The Company  acknowledges and agrees that a Purchaser may from
         time to time pledge  pursuant to a bona fide  margin  agreement  with a
         registered broker-dealer or grant a security interest in some or all of
         the  Securities  to a  financial  institution  that  is an  "accredited
         investor"  as defined in Rule 501(a) under the  Securities  Act and who
         agrees  to be  bound  by the  provisions  of  this  Agreement  and  the

                                       17
<PAGE>

         Registration  Rights Agreement and, if required under the terms of such
         arrangement,  such Purchaser may transfer pledged or secured Securities
         to the pledgees or secured parties. Such a pledge or transfer would not
         be subject to approval  of the  Company  and no legal  opinion of legal
         counsel of the pledgee,  secured  party or pledgor shall be required in
         connection  therewith.  Further,  no notice  shall be  required of such
         pledge.  At the  appropriate  Purchaser'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, if the Securities are
         subject to registration  pursuant to the Registration Rights Agreement,
         the preparation and filing of any required prospectus  supplement under
         Rule 424(b)(3) under the Securities Act or other  applicable  provision
         of the  Securities  Act to  appropriately  amend  the  list of  Selling
         Stockholders thereunder.

                  (c)  Certificates  evidencing  the  Warrant  Shares and Shares
         shall not contain any legend (including the legend set forth in Section
         4.1(b)  hereof):  (i) while a  registration  statement  (including  the
         Registration  Statement)  covering  the  resale  of  such  security  is
         effective  under the Securities Act, or (ii) following any sale of such
         Warrant  Shares  and  Shares  pursuant  to Rule  144,  or (iii) if such
         Warrant  Shares and 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).  The  Company
         shall  cause its  counsel  to issue a legal  opinion  to the  Company's
         transfer agent  promptly  after the Effecti-ve  Date if required by the
         Company's transfer agent to effect the removal of the legend hereunder.
         If all or any portion of a Warrant is exercised  (as  applicable)  at a
         time when there is an  effective  registration  statement  to cover the
         resale of the Warrant Shares and Shares,  or if such Warrant Shares and
         Shares may be sold under Rule 144(k) or if such legend is not otherwise
         required under applicable requirements of the Securities Act (including
         judicial  interpretations  thereof) then such Warrant Shares and Shares
         shall be issued free of all legends.  The Company agrees that following
         the Effective Date or at such time as such legend is no longer required
         under this Section  4.1(c),  it will,  no later than three Trading Days
         following  the delivery by a Purchaser to the Company or the  Company's
         transfer agent of a certificate representing Warrant Shares and Shares,
         as  applicable,  issued with a  restrictive  legend (such third Trading
         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. 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.

                  (d) In addition to such Purchaser's other available  remedies,
         the Company shall pay to a Purchaser,  in cash,  as partial  liquidated
         damages  and not as a penalty,  for each  $1,000 of Warrant  Shares and
         Shares  s  (based  on the VWAP of the  Common  Stock  on the date  such
         Securities are submitted to the Company's transfer agent) delivered for
         removal of the  restrictive  legend and subject to this Section 4.1(c),
         $10 per Trading Day  (increasing  to $20 per Trading Day 5 Trading Days
         after such damages have begun to accrue) for each Trading Day after the
         Legend  Removal  Date until such  certificate  is  delivered  without a
         legend.  Nothing  herein shall limit such  Purchaser's  right to pursue

                                       18
<PAGE>

         actual  damages  for the  Company's  failure  to  deliver  certificates
         representing  any Securities as required by the Transaction  Documents,
         and  such  Purchaser  shall  have  the  right to  pursue  all  remedies
         available to it at law or in equity including,  without  limitation,  a
         decree of specific performance and/or injunctive relief.

                  (e) Each  Purchaser,  severally and not jointly with the other
         Purchasers,  agrees  that the  removal of the  restrictive  legend from
         certificates  representing  Securities as set forth in this Section 4.1
         is predicated upon the Company's  reliance that the Purchaser will sell
         any Securities pursuant to either the registration  requirements of the
         Securities   Act,   including  any   applicable   prospectus   delivery
         requirements, or an exemption therefrom.

         4.2  Acknowledgment  of  Dilution.  The Company  acknowledges  that the
issuance of the Securities may result in dilution of the  outstanding  shares of
Common Stock, which dilution may be substantial under certain market conditions.
The Company  further  acknowledges  that its  obligations  under the Transaction
Documents,  are  unconditional  and absolute and not subject to any right of set
off,  counterclaim,  delay or  reduction,  regardless  of the effect of any such
dilution or any claim the Company may have against any Purchaser and  regardless
of the dilutive effect that such issuance may have on the ownership of the other
stockholders of the Company.

         4.3  Furnishing  of   Information.   As  long  as  any  Purchaser  owns
Securities,  the  Company  covenants  to timely  file (or obtain  extensions  in
respect  thereof  and file  within the  applicable  grace  period)  all  reports
required  to be filed by the  Company  after  the date  hereof  pursuant  to the
Exchange Act. As long as any Purchaser  owns  Securities,  if the Company is not
required to file  reports  pursuant  to the  Exchange  Act, it will  prepare and
furnish to the  Purchasers and make publicly  available in accordance  with Rule
144(c) such information as is required for the Purchasers to sell the Securities
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 Securities without
registration  under the  Securities  Act within the limitation of the exemptions
provided by Rule 144.

         4.4 Integration.  The Company shall not sell, offer for sale or solicit
offers to buy or  otherwise  negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the  Securities  in a manner that would  require the  registration  under the
Securities  Act of the sale of the Securities to the Purchasers or that would be
integrated  with the offer or sale of the  Securities  for purposes of the rules
and regulations of any Trading Market.

         4.5 Intentionally Omitted.

         4.6  Securities  Laws  Disclosure;  Publicity.  The  Company  and  each
Purchaser shall consult with each other in issuing any other press releases with
respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser  shall issue any such press release or otherwise  make any such public
statement  without the prior  consent of the Company,  with respect to any press
release of any Purchaser,  or without the prior consent of each Purchaser,  with
respect  to  any  press  release  of  the  Company,   which  consent  shall  not
unreasonably be withheld, except if such disclosure is required by law, in which

                                       19
<PAGE>

case the  disclosing  party  shall  promptly  provide the other party with prior
notice of such public statement or communication. Notwithstanding the foregoing,
the Company shall not publicly  disclose the name of any  Purchaser,  or include
the name of any Purchaser in any filing with the  Commission  or any  regulatory
agency or Trading  Market,  without the prior written consent of such Purchaser,
except  (i)  as  required  by  federal  securities  law  in  connection  with  a
registration statement and (ii) to the extent such disclosure is required by law
or Trading  Market  regulations,  in which case the  Company  shall  provide the
Purchasers with prior notice of such disclosure permitted under subclause (i) or
(ii).

         4.7  Shareholder  Rights Plan. No claim will be made or enforced by the
Company or, to the knowledge of the Company, any other Person that any Purchaser
is an "Acquiring  Person" under any  shareholder  rights plan or similar plan or
arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the  provisions of any such plan or  arrangement,  by
virtue of  receiving  Securities  under the  Transaction  Documents or under any
other  agreement  between  the  Company and the  Purchasers.  The Company  shall
conduct  its  business  in a manner so that it will not  become  subject  to the
Investment Company Act.

         4.8  Non-Public  Information.  The  Company  covenants  and agrees that
neither it nor any other Person  acting on its behalf will provide any Purchaser
or its  agents  or  counsel  with  any  information  that the  Company  believes
constitutes material non-public information, unless prior thereto such Purchaser
shall have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that each Purchaser shall
be  relying  on the  foregoing  representations  in  effecting  transactions  in
securities of the Company.

         4.9 Intentionally Omitted.

         4.10  Reimbursement.  If any Purchaser becomes involved in any capacity
in any  Proceeding by or against any Person who is a stockholder  of the Company
(except as a result of sales, pledges,  margin sales and similar transactions by
such Purchaser to or with any current  stockholder),  solely as a result of such
Purchaser's acquisition of the Securities under this Agreement, the Company will
reimburse such Purchaser for its reasonable legal and other expenses  (including
the cost of any  investigation  preparation and travel in connection  therewith)
incurred  in  connection   therewith,   as  such  expenses  are  incurred.   The
reimbursement  obligations  of the  Company  under  this  paragraph  shall be in
addition to any  liability  which the Company may otherwise  have,  shall extend
upon the same terms and  conditions to any  Affiliates of the Purchasers who are
actually  named in such  action,  proceeding  or  investigation,  and  partners,
directors,  agents,  employees and controlling persons (if any), as the case may
be, of the  Purchasers  and any such  Affiliate,  and shall be binding  upon and
inure  to  the  benefit  of  any   successors,   assigns,   heirs  and  personal
representatives  of the Company,  the  Purchasers and any such Affiliate and any
such Person.  The Company also agrees that neither the  Purchasers  nor any such
Affiliates,  partners, directors, agents, employees or controlling persons shall
have any liability to the Company or any Person asserting claims on behalf of or
in right of the Company  solely as a result of acquiring  the  Securities  under
this Agreement.

                                       20
<PAGE>

         4.11  Indemnification of Purchasers.  Subject to the provisions of this
Section  4.11,  the Company will  indemnify  and hold the  Purchasers  and their
directors,  officers,  shareholders,  partners,  employees and agents  (each,  a
"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 Agreement or in
the  other  Transaction  Documents  or  (b)  any  action  instituted  against  a
Purchaser, or any of them or their 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 the Transaction  Documents (unless such action
is  based  upon a  breach  of such  Purchaser's  representation,  warranties  or
covenants  under the Transaction  Documents 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 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 Purchasers
in this Agreement or in the other Transaction Documents.

         4.12 Reservation and Listing of Securities.

                  (a) 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.

                  (b) If, on any date,  the number of  authorized  but  unissued
         (and  otherwise  unreserved)  shares of  Common  Stock is less than the
         Warrant Shares to be issued, then the Board of Directors of the Company
         shall  use  commercially  reasonable  efforts  to amend  the  Company's
         certificate  or articles  of  incorporation  to increase  the number of
         authorized but unissued  shares of Common Stock to at least the Warrant
         Shares to be issued at such time,  as soon as possible and in any event
         not later than the 75th day after such date.

                                       21
<PAGE>

                  (c) The  Company  shall,  if  applicable:  (i) in the time and
         manner  required  by the  Trading  Market,  prepare  and file with such
         Trading  Market an additional  shares  listing  application  covering a
         number of shares of Common Stock at least equal to the Required Minimum
         on the date of such application, (ii) take all steps necessary to cause
         such shares of Common  Stock to be approved  for listing on the Trading
         Market as soon as possible thereafter,  (iii) provide to the Purchasers
         evidence of such listing,  and (iv) maintain the listing of such Common
         Stock on any date at least equal to the  Required  Minimum on such date
         on such Trading Market or another Trading Market.

         4.13 Equal Treatment of Purchasers.  No consideration  shall be offered
or paid to any  person to amend or consent  to a waiver or  modification  of any
provision of any of the Transaction  Documents unless the same  consideration is
also offered to all of the parties to the Transaction  Documents.  Further,  the
Company  shall not make any  payment of  principal  or  interest on the Notes in
amounts  which  are   disproportionate  to  the  respective   principal  amounts
outstanding on the Notes at any applicable  time.  For  clarification  purposes,
this  provision  constitutes a separate  right granted to each  Purchaser by the
Company and negotiated  separately by each  Purchaser,  and is intended to treat
for the  Company  the  Note  holders  as a  class  and  shall  not in any way be
construed as the Purchasers  acting in concert or as a group with respect to the
purchase, disposition or voting of Securities or otherwise.

         4.14 Most  Favored  Nation  Provision.  Any time the Company  effects a
subsequent  financing,  each  Purchaser may elect,  in its sole  discretion,  to
exchange all or some of its Notes then held by it for the securities issued in a
subsequent financing based on the then outstanding  principal amount of the Note
plus accrued but unpaid  interest and any other fees then owed by the Company to
the Purchaser, and the effective price at which such securities are sold in such
subsequent financing.

                                   ARTICLE V.
                                  MISCELLANEOUS

         5.1 Termination.  This Agreement may be terminated by any Purchaser, by
written notice to the other parties,  if the Closing has not been consummated on
or before December 30, 2004;  provided that no such  termination will affect the
right of any party to sue for any breach by the other party (or parties).

         5.2 Fees. At the Closing,  the Company has agreed to reimburse DC Asset
Management LLC $7,500, for its legal fees and expenses.  Except as expressly set
forth in the  Transaction  Documents to the  contrary,  each party shall pay the
fees and expenses of its advisers,  counsel,  accountants and other experts,  if
any, and all other expenses  incurred by such party incident to the negotiation,
preparation,  execution, delivery and performance of this Agreement. The Company
shall pay all transfer agent fees, stamp taxes and other taxes and duties levied
in connection with the issuance of any Securities.

         5.3 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.

                                       22
<PAGE>

         5.4 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
set forth on the signature  pages  attached  hereto prior to 5:30 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 set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (c) the second  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 set forth on the signature pages attached
hereto.

         5.5 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 each  Purchaser  or, in the case of a waiver,  by the party
against whom enforcement of any such waiver is sought.  No waiver of any default
with respect to any provision,  condition or requirement of this Agreement shall
be deemed to be a continuing  waiver in the future or a waiver of any 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.

         5.6 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.

         5.7  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 each  Purchaser.  Any Purchaser may assign
any or all of its  rights  under  this  Agreement  to any  Person  to whom  such
Purchaser  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 "Purchasers".

         5.8 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 as otherwise set forth in Section 4.11.

         5.9 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance  with the internal laws of the State of
New York,  without  regard to the  principles of conflicts of law thereof.  Each
party  agrees  that  all  legal  proceedings   concerning  the  interpretations,
enforcement and defense of the  transactions  contemplated by this Agreement and

                                       23
<PAGE>

any other Transaction  Documents  (whether brought against a party hereto or its
respective affiliates,  directors, officers, shareholders,  employees or agents)
shall be commenced  exclusively  in the state and federal  courts sitting in the
City of New  York.  Each  party  hereby  irrevocably  submits  to the  exclusive
jurisdiction  of the state and federal  courts  sitting in the City of New York,
borough  of  Manhattan  for the  adjudication  of any  dispute  hereunder  or in
connection  herewith or with any  transaction  contemplated  hereby or discussed
herein  (including  with respect to the  enforcement  of any of the  Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit,
action  or  proceeding,  any  claim  that it is not  personally  subject  to the
jurisdiction of any such court, that such suit, action or proceeding is improper
or inconvenient venue for such proceeding.  Each party hereby irrevocably waives
personal  service of process and  consents to process  being  served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or  overnight  delivery  (with  evidence of  delivery) to such party at the
address in effect for  notices to it under this  Agreement  and agrees that such
service  shall  constitute  good and  sufficient  service of process  and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve  process in any manner  permitted by law. The parties  hereby waive all
rights  to a trial  by jury.  If  either  party  shall  commence  an  action  or
proceeding to enforce any  provisions  of the  Transaction  Documents,  then the
prevailing  party in such action or proceeding  shall be reimbursed by the other
party for its  attorneys'  fees and other costs and expenses  incurred  with the
investigation, preparation and prosecution of such action or proceeding.

         5.10 Survival.  The  representations  and warranties  contained  herein
shall survive the Closing and the delivery,  exercise  and/or  conversion of the
Securities, as applicable for the applicable statue of limitations.

         5.11  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.

         5.12  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.

         5.13 Rescission and Withdrawal Right.  Notwithstanding  anything to the
contrary  contained in (and  without  limiting  any similar  provisions  of) the
Transaction  Documents,  whenever  any  Purchaser  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
Purchaser 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;  provided,

                                       24
<PAGE>

however,  in the case of a rescission of a conversion  of a Note,  the Purchaser
shall be  required  to return  any  shares of Common  Stock  subject to any such
rescinded conversion or exercise notice.

         5.14  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.

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

         5.16 Payment Set Aside.  To the extent that the Company makes a payment
or payments to any Purchaser pursuant to any Transaction Document or a Purchaser
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.

         5.17 Usury.  To the extent it may  lawfully  do so, the Company  hereby
agrees not to insist upon or plead or in any manner  whatsoever  claim, and will
resist any and all efforts to be compelled to take the benefit or advantage  of,
usury  laws  wherever  enacted,  now or at  any  time  hereafter  in  force,  in
connection  with any  claim,  action or  proceeding  that may be  brought by any
Purchaser  in  order to  enforce  any  right or  remedy  under  any  Transaction
Document.  Notwithstanding  any  provision  to  the  contrary  contained  in any
Transaction  Document,  it is  expressly  agreed  and  provided  that the  total
liability of the Company  under the  Transaction  Documents  for payments in the
nature of interest  shall not exceed the maximum  lawful rate  authorized  under
applicable law (the "Maximum Rate"), and, without limiting the foregoing,  in no
event  shall any rate of  interest or default  interest,  or both of them,  when
aggregated with any other sums in the nature of interest that the Company may be
obligated to pay under the Transaction Documents exceed such Maximum Rate. It is
agreed  that  if the  maximum  contract  rate  of  interest  allowed  by law and
applicable to the Transaction  Documents is increased or decreased by statute or

                                       25
<PAGE>

any official  governmental action subsequent to the date hereof, the new maximum
contract rate of interest  allowed by law will be the Maximum Rate applicable to
the  Transaction  Documents  from  the  effective  date  forward,   unless  such
application  is  precluded  by  applicable  law.  If  under  any   circumstances
whatsoever, interest in excess of the Maximum Rate is paid by the Company to any
Purchaser with respect to indebtedness  evidenced by the Transaction  Documents,
such excess shall be applied by such Purchaser to the unpaid  principal  balance
of any such  indebtedness or be refunded to the Company,  the manner of handling
such excess to be at such Purchaser's election.

         5.18  Independent  Nature of Purchasers'  Obligations  and Rights.  The
obligations of each Purchaser under any Transaction Document 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 any Transaction  Document.  Nothing  contained  herein or in any
Transaction  Document,  and no action taken by any Purchaser  pursuant  thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint  venture  or any other kind of entity,  or create a  presumption  that the
Purchasers  are in any way acting in concert or as a group with  respect to such
obligations or the transactions  contemplated by the Transaction Document.  Each
Purchaser  shall be  entitled to  independently  protect and enforce its rights,
including without  limitation the rights arising out of this Agreement or out of
the other  Transaction  Documents,  and it shall not be necessary  for any other
Purchaser  to be  joined  as an  additional  party  in any  proceeding  for such
purpose.  Each Purchaser has been  represented by its own separate legal counsel
in their review and  negotiation of the  Transaction  Documents.  For reasons of
administrative  convenience only,  Purchasers and their respective  counsel have
chosen to communicate  with the Company through KW. KW does not represent all of
the Purchasers but only DCOFI Master LDC. The Company has elected to provide all
Purchasers with the same terms and Transaction  Documents for the convenience of
the  Company  and not  because  it was  required  or  requested  to do so by the
Purchasers.

         5.19 Liquidated Damages.  The Company's  obligations to pay any partial
liquidated  damages or other amounts owing under the Transaction  Documents is a
continuing  obligation of the Company and shall not  terminate  until all unpaid
partial liquidated damages and other amounts have been paid  notwithstanding the
fact that the instrument or security  pursuant to which such partial  liquidated
damages or other amounts are due and payable shall have been canceled.

                            (Signature Pages Follow)

                                       26
<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.

KNOBIAS, INC.                               Address for Notice:
                                            -------------------

                                            Building 2, Suite 500
/s/ E. KEY RAMSEY                           875 Northpark Drive
-----------------
E. Key Ramsey                               Ridgeland, Mississippi  39157
President
                                            Telephone:       (601) 978-3399
                                            Facsimile:       (601) 978-3675

With a copy to (which shall not
constitute notice):                         Watkins & Eager PLLC
                                            400 East Capitol Street, Suite 300
                                            Jackson, Mississippi  39201
                                            Telephone:       (601) 948-6470
                                            Facsimile:       (601) 354-3623

                                            Attention:       James A. Lowe, III

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

                                       27
<PAGE>

      [PURCHASER SIGNATURE PAGES TO KNOBIAS SECURITIES PURCHASE AGREEMENT]

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

Name of Investing Entity: DCOFI Master LDC
                          ------------------------------------------------------
Signature of Authorized Signatory of Investing Entity: /s/ JEFFREY M. HAAS
                                                       -------------------------
Name of Authorized Signatory: Jeffrey M. Haas
                              --------------------------------------------------
Title of Authorized Signatory: Senior Vice-President
                               -------------------------------------------------
Email Address of Authorized Entity:_____________________________________________

Address for Notice of Investing Entity:

DCOFI Master LDC
Attn:  Jeffrey Haas
830 Third Avenue, 14th Floor
New York, New York 10022

Address for Delivery of Securities for Investing Entity (if not same as above):

Same

Subscription Amount: $550,000
EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

                                       28Exhibit 4.2

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE
HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR THE
SECURITIES   COMMISSION  OF  ANY  STATE  IN  RELIANCE  UPON  AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS 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.  THIS  SECURITY  MAY BE PLEDGED IN  CONNECTION  WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: March 15, 2005
                                                                     $550,000.00

           12% SENIOR SUBORDINATED SECURED NOTE DUE SEPTEMBER 1, 2006

            THIS NOTE is duly  authorized  and issued  12%  Senior  Subordinated
Secured Notes of Knobias, Inc., a Delaware corporation, having a principal place
of  business  at 875  Northpark  Drive,  Ridgeland,  MS 39157  (the  "Company"),
designated as its 12% Senior  Subordinated  Secured Note,  due September 1, 2006
(the  "Note(s)").  This Note is being  exchanged  for the  Company's  12% Senior
Subordinated Notes due June 15, 2005.

         FOR VALUE RECEIVED,  the Company promises to pay to DCOFI MASTER LDC or
its  registered  assigns (the  "Holder"),  the principal sum of  $550,000.00  on
September 1, 2006 or such earlier date as the Notes are required or permitted to
be repaid as provided  hereunder (the "Maturity  Date"),  and to pay interest to
the Holder on the aggregate unconverted and then outstanding principal amount of
this Note in accordance with the provisions hereof.  This Note is subject to the
following additional provisions:

         Section 1.  Definitions.  For the purposes  hereof,  in addition to the
terms  defined  elsewhere  in this Note:  (a)  capitalized  terms not  otherwise
defined herein have the meanings given to such terms in the Purchase  Agreement,
and (b) the following terms shall have the following meanings:

                  "Alternate  Consideration" shall have the meaning set forth in
         Section 4(c).

                  "Business Day" means any day except  Saturday,  Sunday and any
         day which shall be a federal  legal  holiday in the United  States or a

                                       1
<PAGE>

         day on  which  banking  institutions  in the  State  of  New  York  are
         authorized or required by law or other government action to close.

                  "Change of Control Transaction" means the occurrence of any of
         (i) an  acquisition  after the date  hereof by an  individual  or legal
         entity or "group" (as described in Rule 13d-5(b)(1)  promulgated  under
         the  Exchange  Act) of  effective  control  (whether  through  legal or
         beneficial  ownership of capital  stock of the Company,  by contract or
         otherwise) of in excess of 33% of the voting securities of the Company,
         or (ii) a replacement at one time or within a three year period of more
         than one-half of the members of the Company's  board of directors which
         is not approved by a majority of those  individuals  who are members of
         the board of directors on the date hereof (or by those  individuals who
         are  serving  as members  of the board of  directors  on any date whose
         nomination  to the board of directors was approved by a majority of the
         members of the board of directors  who are members on the date hereof),
         or (iii) the  execution  by the  Company of an  agreement  to which the
         Company  is a party or by which it is bound,  providing  for any of the
         events set forth above in (i) or (ii).

                  "Common Stock" means the common stock, $ .01 par value, of the
         Company  and  stock of any other  class  into  which  such  shares  may
         hereafter have been reclassified or changed.

                  "Event of Default" shall have the meaning set forth in Section
         8.

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

                  "Fundamental  Transaction" shall have the meaning set forth in
         Section 4(c) hereof.

                  "Late  Fees"  shall have the  meaning  set forth in the second
         paragraph to this Note.

                  "Mandatory  Prepayment  Amount"  for any Notes shall equal the
         sum of (i) (A) 100% of the  principal  amount  of Notes to be  prepaid,
         plus all accrued and unpaid interest  thereon if such prepayment  shall
         occur on or before  ninety (90) days from the date hereof,  or (B) 105%
         of the  principal  amount of Notes to be prepaid,  plus all accrued and
         unpaid  interest  thereon if such  prepayment  shall occur after ninety
         (90) days from the date hereof and prior to the Maturity  Date and (ii)
         all other  amounts,  costs,  expenses  and  liquidated  damages  due in
         respect of such Notes.

                   "Original  Issue  Date"  shall  mean  the  date of the  first
         issuance of the Notes regardless of the number of transfers of any Note
         and  regardless  of the  number of  instruments  which may be issued to
         evidence such Note.

                  "Person" means a corporation,  an association,  a partnership,
         organization,  a business,  an  individual,  a government  or political
         subdivision thereof or a governmental agency.

                                       2
<PAGE>

                  "Purchase  Agreement" means the Securities Purchase Agreement,
         dated as of March 15,  2005,  to which  the  Company  and the  original
         Holder are parties,  as amended,  modified or supplemented from time to
         time in accordance with its terms.

                  "Securities Act" means the Securities Act of 1933, as amended,
         and the rules and regulations promulgated thereunder.

                  "Subsidiary"  shall have the meaning given to such term in the
         Purchase Agreement.

                  "Trading  Day" means a day on which the Common Stock is traded
         on a Trading Market.

                  "Trading  Market" means the following  markets or exchanges on
         which the Common  Stock is listed or quoted for  trading on the date in
         question:  the Nasdaq SmallCap Market, the American Stock Exchange, the
         New York Stock Exchange, the Nasdaq National Market or the OTC Bulletin
         Board.

                  "Transaction  Documents"  shall have the  meaning set forth in
         the Purchase Agreement.

         Section 2.   Interest and Prepayments.

                  a) Payment of Interest in Cash. The Company shall pay interest
         to the Holder on the aggregate and outstanding principal amount of this
         Note at the rate of 12% per annum, payable monthly in cash on the first
         day of each month,  beginning on the first such date after the Original
         Issue Date and on the Maturity  Date (except  that, if any such date is
         not a  Business  Day,  then  such  payment  shall  be due  on the  next
         succeeding Business Day).

                  b) Late Fee.  All overdue  accrued  and unpaid  interest to be
         paid hereunder shall entail a late fee at the rate of 20% per annum (or
         such lower  maximum  amount of interest  permitted to be charged  under
         applicable  law) ("Late  Fee") which will accrue  daily,  from the date
         such  interest  is due  hereunder  through  and  including  the date of
         payment.

                  c) Optional  Prepayment.  The Company  shall have the right to
         prepay,  in cash,  all or a portion of the Notes for an amount equal to
         such  percentage  of the  principal  amount to be repaid at 110% of the
         principal amount thereof,  plus all accrued and unpaid interest thereon
         to the date of repayment.

         Section 3.   Registration of Transfers and Exchanges.

                  a) Different  Denominations.  This Note is exchangeable for an
         equal  aggregate  principal  amount  of Notes of  different  authorized
         denominations,  as requested by the Holder  surrendering  the same.  No
         service  charge  will be made  for such  registration  of  transfer  or
         exchange.

                                       3
<PAGE>

                  b)  Investment  Representations.  This  Note has  been  issued
         subject to certain  investment  representations  of the original Holder
         set forth in the Purchase Agreement and may be transferred or exchanged
         only in compliance with the Purchase  Agreement and applicable  federal
         and state securities laws and regulations.

                  c) Reliance on Note Register.  Prior to due presentment to the
         Company  for  transfer  of this Note,  the Company and any agent of the
         Company may treat the Person in whose name this Note is duly registered
         on the Note  Register as the owner  hereof for the purpose of receiving
         payment as herein provided and for all other  purposes,  whether or not
         this Note is overdue,  and neither the Company nor any such agent shall
         be affected by notice to the contrary.

         Section 4. Negative  Covenants.  So long as any portion of this Note is
outstanding, the Company will not and will not permit any of its Subsidiaries to
directly or indirectly:

                  a) Other than liens or indebtedness pursuant to the 8% Secured
         Convertible  Notes due November 1, 2006,  (the "8% Notes")  enter into,
         create,  incur,  assume or suffer to exist any indebtedness or liens of
         any kind, on or with respect to any of its property or assets now owned
         or hereafter  acquired or any interest therein or any income or profits
         therefrom  that is senior to, or pari passu with,  in any respect,  the
         Company's obligations under the Notes;

                  b) amend its  certificate  of  incorporation,  bylaws or other
         charter documents so as to adversely affect any rights of the Holder;

                  c)  repay,   repurchase  or  offer  to  repay,  repurchase  or
         otherwise  acquire any of its Common Stock,  Preferred  Stock, or other
         equity securities; or

                  d)  enter  into  any  agreement  with  respect  to  any of the
         foregoing.

         Section 5.   Events of Default.

                  a) "Event of Default",  wherever used herein, means any one of
         the  following  events  (whatever  the reason  and  whether it shall be
         voluntary or involuntary or effected by operation of law or pursuant to
         any  judgment,  decree or order of any  court,  or any  order,  rule or
         regulation of any administrative or governmental body):

                           i. any default in the payment of (A) the principal of
                  amount of any Note, or (B) interest  (including Late Fees) on,
                  or damages in respect  of, any Note,  in each case free of any
                  claim of subordination,  as and when the same shall become due
                  and payable  (whether on the Maturity Date or by  acceleration
                  or otherwise) which default, solely in the case of an interest
                  payment or other default under clause (B) above, is not cured,
                  within 2 Trading Days;

                                       4
<PAGE>

                           ii. the Company  shall fail to observe or perform any
                  other  covenant or agreement  contained in this Note or any of
                  the other Transaction Documents which failure is not cured, if
                  possible to cure, within the earlier to occur of (A) 5 Trading
                  Days after notice of such default sent by the Holder or by any
                  other Holder and (B) 10 Trading  Days after the Company  shall
                  become or should have become aware of such failure;

                           iii. a default or event of  default  (subject  to any
                  grace or cure period provided for in the applicable agreement,
                  document  or  instrument)  shall  occur  under  (A) any of the
                  Transaction  Documents  other than the Notes, or (B) any other
                  material agreement, lease, document or instrument to which the
                  Company or any Subsidiary is bound;

                           iv. any  representation  or warranty made herein,  in
                  any  other  Transaction  Document,  in any  written  statement
                  pursuant hereto or thereto, or in any other report,  financial
                  statement  or  certificate  made or delivered to the Holder or
                  any other  holder of Notes shall be untrue or incorrect in any
                  material respect as of the date when made or deemed made;

                           v. (i) the Company or any of its  Subsidiaries  shall
                  commence,  or there shall be commenced  against the Company or
                  any such Subsidiary, a case under any applicable bankruptcy or
                  insolvency laws as now or hereafter in effect or any successor
                  thereto, or the Company or any Subsidiary  commences any other
                  proceeding under any reorganization,  arrangement,  adjustment
                  of  debt,  relief  of  debtors,  dissolution,   insolvency  or
                  liquidation or similar law of any jurisdiction  whether now or
                  hereafter in effect  relating to the Company or any Subsidiary
                  thereof or (ii) there is commenced  against the Company or any
                  Subsidiary  thereof any such  bankruptcy,  insolvency or other
                  proceeding which remains  undismissed for a period of 60 days;
                  or (iii) the Company or any Subsidiary  thereof is adjudicated
                  by a court of competent jurisdiction insolvent or bankrupt; or
                  any order of relief or other order  approving any such case or
                  proceeding is entered;  or (iv) the Company or any  Subsidiary
                  thereof  suffers any  appointment of any custodian or the like
                  for it or any substantial part of its property which continues
                  undischarged  or unstayed for a period of 60 days;  or (v) the
                  Company or any Subsidiary  thereof makes a general  assignment
                  for the benefit of  creditors;  or (vi) the Company shall fail
                  to pay,  or shall  state that it is unable to pay, or shall be
                  unable to pay,  its debts  generally  as they  become  due; or
                  (vii) the  Company  or any  Subsidiary  thereof  shall  call a
                  meeting  of  its   creditors   with  a  view  to  arranging  a
                  composition,  adjustment  or  restructuring  of its debts;  or
                  (viii) the Company or any Subsidiary  thereof shall by any act
                  or failure to act expressly  indicate its consent to, approval
                  of or  acquiescence  in any  of the  foregoing;  or  (ix)  any
                  corporate  or other  action  is taken  by the  Company  or any
                  Subsidiary  thereof  for the purpose of  effecting  any of the
                  foregoing;

                           vi. the Company or any  Subsidiary  shall  default in
                  any of its obligations under any mortgage, credit agreement or
                  other facility,  indenture  agreement,  factoring agreement or

                                       5
<PAGE>

                  other instrument under which there may be issued,  or by which
                  there  may  be  secured  or  evidenced  any  indebtedness  for
                  borrowed  money or money due under  any long term  leasing  or
                  factoring  arrangement  of the Company in an amount  exceeding
                  $150,000,  whether  such  indebtedness  now  exists  or  shall
                  hereafter  be created and such  default  shall  result in such
                  indebtedness  becoming or being declared due and payable prior
                  to the  date  on  which  it  would  otherwise  become  due and
                  payable;

                           vii.  the  Common  Stock  shall not be  eligible  for
                  quotation  on or quoted for  trading  on a Trading  Market and
                  shall  not again be  eligible  for and  quoted  or listed  for
                  trading thereon within five Trading Days;

                           viii.  the Company  shall be a party to any Change of
                  Control Transaction or Fundamental Transaction, shall agree to
                  sell or  dispose  of all or in excess of 33% of its  assets in
                  one or more  transactions  (whether  or not  such  sale  would
                  constitute a Change of Control Transaction) or shall redeem or
                  repurchase  more than a de minimis  number of its  outstanding
                  shares  of  Common  Stock or other  equity  securities  of the
                  Company  (other than  repurchases of shares of Common Stock or
                  other equity securities of departing officers and directors of
                  the  Company;  provided  such  repurchases  shall  not  exceed
                  $100,000,  in the  aggregate,  for all officers and  directors
                  during the term of this Note);

                                       6
<PAGE>

                  b)  Remedies  Upon Event of  Default.  If any Event of Default
         occurs, the full principal amount of this Note,  together with interest
         and other amounts owing in respect thereof, to the date of acceleration
         shall become, at the Holder's election,  immediately due and payable in
         cash.  The aggregate  amount  payable upon an Event of Default shall be
         equal to the Mandatory  Prepayment Amount.  Commencing 5 days after the
         occurrence  of any  Event  of  Default  that  results  in the  eventual
         acceleration  of this Note, the interest rate on this Note shall accrue
         at the rate of 20% per annum,  or such lower maximum amount of interest
         permitted to be charged under  applicable  law. All Notes for which the
         full  Mandatory  Prepayment  Amount  hereunder  shall have been paid in
         accordance  herewith shall promptly be surrendered to or as directed by
         the Company.  The Holder need not provide and the Company hereby waives
         any presentment,  demand,  protest or other notice of any kind, and the
         Holder may  immediately  and  without  expiration  of any grace  period
         enforce any and all of its rights and remedies  hereunder and all other
         remedies  available to it under applicable law. Such declaration may be
         rescinded and annulled by Holder at any time prior to payment hereunder
         and the Holder  shall have all rights as a Note holder until such time,
         if any, as the full payment under this Section shall have been received
         by it. No such  rescission  or annulment  shall  affect any  subsequent
         Event of Default or impair any right consequent thereon.

         Section 6.   Miscellaneous.

                  a)  Notices.  Any and all notices or other  communications  or
         deliveries to be provided by the Holders  hereunder shall be in writing
         and delivered personally, by facsimile, sent by a nationally recognized

                                       7
<PAGE>

         overnight courier service, addressed to the Company, at the address set
         forth above,  facsimile  number (601)  978-3675,  Attn:  E. Key Ramsey,
         President, or such other address or facsimile number as the Company may
         specify  for such  purposes  by  notice  to the  Holders  delivered  in
         accordance   with  this   Section.   Any  and  all   notices  or  other
         communications  or deliveries  to be provided by the Company  hereunder
         shall be in writing and delivered personally,  by facsimile,  sent by a
         nationally  recognized  overnight  courier  service  addressed  to each
         Holder at the  facsimile  telephone  number or address  of such  Holder
         appearing  on  the  books  of  the  Company,  or if no  such  facsimile
         telephone number or address appears, at the principal place of business
         of  the  Holder.  Any  notice  or  other  communication  or  deliveries
         hereunder  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 5:30 p.m.  (New York City time),  (ii) the date after
         the date of transmission,  if such notice or communication is delivered
         via  facsimile  at the  facsimile  telephone  number  specified in this
         Section  later  than  5:30 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
         second  Business  Day  following  the  date  of  mailing,  if  sent  by
         nationally  recognized  overnight courier service,  or (iv) upon actual
         receipt by the party to whom such notice is required to be given.

                  b) Absolute  Obligation.  Except as expressly provided herein,
         no provision of this Note shall alter or impair the  obligation  of the
         Company, which is absolute and unconditional,  to pay the principal of,
         interest  and  liquidated  damages  (if any) on, this Note at the time,
         place, and rate, and in the coin or currency,  herein prescribed.  This
         Note is a direct debt  obligation of the Company.  This Note ranks pari
         passu with all other Notes now or hereafter  issued under the terms set
         forth herein

                  c) Lost or Mutilated  Note.  If this Note shall be  mutilated,
         lost,  stolen or destroyed,  the Company shall execute and deliver,  in
         exchange  and  substitution  for and upon  cancellation  of a mutilated
         Note, or in lieu of or in substitution for a lost,  stolen or destroyed
         Note, a new Note for the  principal  amount of this Note so  mutilated,
         lost,  stolen or  destroyed  but only upon  receipt of evidence of such
         loss,  theft or destruction of such Note, and of the ownership  hereof,
         and  indemnity,  if  requested,  all  reasonably  satisfactory  to  the
         Company.

                  d) Security Interest/Subordination. This Note is a direct debt
         obligation  of the Company and,  pursuant to the Security  Agreement is
         secured by a second priority  perfected security interest in all of the
         assets of the Company for the benefit of the Holders.  The  obligations
         of the Company to the Holders are  subordinated  in right of payment to
         the obligations owing to the holders of the 8% Notes.

                  e) Governing Law. All questions  concerning the  construction,
         validity, enforcement and interpretation of this Note shall be governed
         by and construed  and enforced in accordance  with the internal laws of
         the State of New York, without regard to the principles of conflicts of
         law thereof.  Each party agrees that all legal  proceedings  concerning
         the  interpretations,  enforcement  and  defense  of  the  transactions
         contemplated  by any  of the  Transaction  Documents  (whether  brought

                                       8
<PAGE>

         against  a  party  hereto  or  its  respective  affiliates,  directors,
         officers, shareholders,  employees or agents) shall be commenced 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 suit, action
         or  proceeding,  any claim  that it is not  personally  subject  to the
         jurisdiction of any such court, or such New York Courts are improper or
         inconvenient  venue for such proceeding.  Each party hereby irrevocably
         waives personal service of process and consents to process being served
         in any such suit,  action or  proceeding  by mailing a copy thereof via
         registered or certified  mail or overnight  delivery  (with evidence of
         delivery)  to such party at the  address  in effect  for  notices to it
         under this Note and agrees that such service shall  constitute good and
         sufficient  service of process and notice  thereof.  Nothing  contained
         herein  shall be deemed to limit in any way any right to serve  process
         in any manner  permitted by law. Each party hereto  hereby  irrevocably
         waives,  to the fullest extent permitted by applicable law, any and all
         right  to  trial  by jury in any  legal  proceeding  arising  out of or
         relating  to this  Note or the  transactions  contemplated  hereby.  If
         either  party  shall  commence an action or  proceeding  to enforce any
         provisions of this Note,  then the  prevailing  party in such action or
         proceeding  shall be  reimbursed  by the other party for its  attorneys
         fees and other  costs and  expenses  incurred  with the  investigation,
         preparation and prosecution of such action or proceeding.

                  f) Waiver. Any waiver by the Company or the Holder of a breach
         of any  provision  of this Note shall not operate as or be construed to
         be a waiver of any other  breach of such  provision or of any breach of
         any other  provision  of this Note.  The  failure of the Company or the
         Holder to insist upon strict  adherence to any term of this Note on one
         or more  occasions  shall not be  considered  a waiver or deprive  that
         party of the right  thereafter to insist upon strict  adherence to that
         term or any other term of this Note. Any waiver must be in writing.

                  g)  Severability.  If any  provision  of this Note is invalid,
         illegal or  unenforceable,  the  balance  of this Note shall  remain in
         effect,  and  if  any  provision  is  inapplicable  to  any  person  or
         circumstance,  it shall  nevertheless  remain  applicable  to all other
         persons and  circumstances.  If it shall be found that any  interest or
         other amount deemed  interest due hereunder  violates  applicable  laws
         governing  usury,  the applicable  rate of interest due hereunder shall
         automatically  be  lowered  to  equal  the  maximum  permitted  rate of
         interest.  The Company covenants (to the extent that it may lawfully do
         so) that it shall not at any time insist upon,  plead, or in any manner
         whatsoever  claim  or take the  benefit  or  advantage  of,  any  stay,
         extension or usury law or other law which would prohibit or forgive the
         Company from paying all or any portion of the  principal of or interest
         on this Note as contemplated  herein,  wherever enacted,  now or at any
         time  hereafter  in force,  or which may  affect the  covenants  or the
         performance  of this  indenture,  and the Company (to the extent it may
         lawfully do so) hereby  expressly  waives all  benefits or advantage of

                                       9
<PAGE>

         any such law,  and  covenants  that it will not,  by resort to any such
         law, hinder, delay or impeded the execution of any power herein granted
         to the Holder,  but will suffer and permit the  execution of every such
         as though no such law has been enacted.

                  h) Next Business Day. Whenever any payment or other obligation
         hereunder shall be due on a day other than a Business Day, such payment
         shall be made on the next succeeding Business Day.

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

                              *********************

                                       10
<PAGE>

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

                                          KNOBIAS, INC.

                                          /s/ E. KEY RAMSEY
                                          -------------------------
                                          E. Key Ramsey, President

                                       11

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