Document:

Exhibit
      4.1

    

    21st
      CENTURY HOLDING COMPANY

    4161
      N.W. 5TH
      STREET

    PLANTATION,
      FL 33317

    

    UNIT
      PURCHASE AGREEMENT

    

    

    

    TO
      THE PURCHASERS LISTED IN

    THE
      ATTACHED SCHEDULE A:

    

    Ladies
      and Gentlemen:

    

    21st
      Century
      Holding Company, a Florida corporation (the “Company”), agrees with the
      Purchasers listed in the attached Schedule
      A
      (the
“Purchasers”) to this Unit Purchase Agreement (this “Agreement”) as
      follows:

    

    SECTION
      1.  CERTAIN DEFINITIONS.

     

    As
      used
      herein, the following terms have the respective meanings set forth below or
      set
      forth in the Section hereof following such term:

     

    “Affiliate”
      means, at any time, and with respect to any Person, (a) any other Person that
      at
      such time directly or indirectly through one or more intermediaries Controls,
      or
      is Controlled by, or is under common Control with, such first Person, and (b)
      any Person beneficially owning or holding, directly or indirectly, 10% or more
      of any class of equity interests of the Company or any Subsidiary or any
      corporation of which the Company and its Subsidiaries beneficially own or hold,
      in the aggregate, directly or indirectly, 10% or more of any class of equity
      interests.  As used in this definition, “Control” means the possession,
      directly or indirectly, of the power to direct or cause the direction of the
      management and policies of a Person, whether through the ownership of voting
      securities, by contract or otherwise.

     

    “Business
      Day” means any day other than a Saturday, a Sunday or a day on which the Nasdaq
      National Market (“Nasdaq”) is required or authorized to be closed.

     

    “Capital
      Lease” means, at any time, a lease with respect to which the lessee is required
      concurrently to recognize the acquisition of an asset and the incurrence of
      a
      liability in accordance with GAAP.

     

    “Capital
      Lease Obligation” means, with respect to any Person and a Capital Lease, the
      amount of the obligation of such Person as the lessee under such Capital Lease
      which would, in accordance with GAAP, appear as a liability on a balance sheet
      of such Person.

     

    “Change
      of Control” is defined in Section 7.2(h).

     

    
      
        
        

      

      
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    “Code”
      means the Internal Revenue Code of 1986, as amended from time to time, and
      the
      rules and regulations promulgated thereunder from time to time.

     

    “Confidential
      Information” is defined in Section 20.

     

    “Default”
      means an event or condition the occurrence or existence of which would, with
      the
      lapse of time or the giving of notice or both, become an Event of
      Default.

     

    “Eligible
      Subsidiary” means each of the Company’s Subsidiaries, except such Subsidiaries
      which are regulated by the Florida Department of Financial Service or successor
      entity.

     

    “Exchange
      Act” means the Securities Exchange Act of 1934, as amended.

     

    “Fair
      Market Value” means, at any time and with respect to any property, the sale
      value of such property that would be realized in an arm's-length sale at such
      time between an informed and willing buyer and an informed and willing seller
      (neither being under a compulsion to buy or sell), as reasonably determined
      in
      the good faith opinion of the Company's board of directors.

     

    “GAAP”
      means generally accepted accounting principles as in effect from time to time
      in
      the United States of America.

     

    “Guarantor”
      shall mean those certain Eligible Subsidiaries of the Company which shall be
      a
      party to a Subsidiary Guarantee.

     

    “Guaranty”
      means, with respect to any Person, any obligation (except the endorsement in
      the
      ordinary course of business of negotiable instruments for deposit or collection)
      of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend
      or other obligation of any other Person in any manner, whether directly or
      indirectly, including (without limitation) obligations incurred through an
      agreement, contingent or otherwise, by such Person:  (a) to purchase such
      Indebtedness or obligation or any property constituting security therefor
      primarily for the purpose of assuring the owner of such Indebtedness or
      obligation of the ability of any other Person to make payment of the
      Indebtedness or obligation; (b) to advance or supply funds (i) for the purchase
      or payment of such Indebtedness or obligation, or (ii) to maintain any working
      capital or other balance sheet condition or any income statement condition
      of
      any other Person or otherwise to advance or make available funds for the
      purchase or payment of such Indebtedness or obligation; (c) to lease properties
      or to purchase properties or services primarily for the purpose of assuring
      the
      owner of such Indebtedness or obligation of the ability of any other Person
      to
      make payment of the Indebtedness or obligation; or (d) otherwise to assure
      the
      owner of such Indebtedness or obligation against loss in respect
      thereof.

     

    In
      any
      computation of the Indebtedness or other liabilities of the obligor under any
      Guaranty, the Indebtedness or other obligations that are the subject of such
      Guaranty shall be assumed to be direct obligations of such obligor, provided
      that the amount of such Indebtedness outstanding for purposes of this Agreement
      shall not be exceed the maximum amount of Indebtedness that is the subject
      of
      such Guaranty.

     

    
      
        
        

      

      
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    “Holder”
      means, with respect to any Note, the Person in whose name such Note is
      registered in the register maintained by the Company pursuant to Section
      14.1.

     

    “Indebtedness” means,
      with respect to any Person, without duplication, (a) all liabilities of such
      Person for borrowed money (including overdrafts) or for the deferred purchase
      price of property or services, excluding any trade payables and other accrued
      current liabilities incurred in the ordinary course of business, but including,
      without limitation, all obligations, contingent or otherwise, of such Person
      in
      connection with any letters of credit and acceptances issued under letter of
      credit facilities, acceptance facilities or other similar facilities, (b) all
      obligations of such Person evidenced by bonds, notes, debentures or other
      similar instruments, (c) all indebtedness of such Person created or arising
      under any conditional sale or other title retention agreement with respect
      to
      property acquired by such Person (even if the rights and remedies of the seller
      or lender under such agreement in the event of default are limited to
      repossession or sale of such property), but excluding trade payables arising
      in
      the ordinary course of business, (d) all Capitalized Lease Obligations of such
      Person, (e) all Indebtedness referred to in (but not excluded from) the
      preceding clauses of other Persons and all dividends of other Persons, the
      payment of which is secured by (or for which the holder of such Indebtedness
      has
      an existing right, contingent or otherwise, to be secured by) any Lien upon
      or
      with respect to property (including, without limitation, accounts and contract
      rights) owned by such Person, even though such Person has not assumed or become
      liable for the payment of such Indebtedness (the amount of such obligation
      being
      deemed to be the lesser of the Fair Market Value of such property or asset
      or
      the amount of the obligation so secured), and (f) all guarantees by such Person
      of Indebtedness referred to in this definition of any other Person.

     

    “Interest
      Shares” is defined in Section 9.

     

    “Investments”
      shall mean all investments, in cash or by delivery of property made, directly
      or
      indirectly in any Person, whether by acquisition of shares of capital stock,
      indebtedness or other obligations or securities or by loan, advance, capital
      contribution or otherwise.

     

    “Lien”
      means, with respect to any Person, any mortgage, lien, pledge, charge, security
      interest or other encumbrance, or any interest or title of any vendor, lessor,
      lender or other secured party to or of such Person under any conditional sale
      or
      other title retention agreement or Capital Lease, upon or with respect to any
      property or asset of such Person.

     

    “Material”
      means material in relation to the business, operations, affairs, financial
      condition, assets or properties of the Company and its Subsidiaries taken as
      a
      whole.

     

    “Material
      Adverse Effect” means a material adverse effect on (a) the business, operations,
      affairs, financial condition, assets or properties of the Company and its
      Subsidiaries taken as a whole, or (b) the ability of the Company to perform
      its
      obligations under this Agreement, the Notes and the Warrants, or (c) the
      validity or enforceability of this Agreement, the Notes or the
      Warrants.

     

    “Notes”
      is defined in Section 2.

     

    “Offering
      Document” is defined in Section 6.3.

     

    
      
        
        

      

      
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    “Permitted
      Indebtedness” means
      any
      of the following:

     

    (a)
      Indebtedness of the Company or its Subsidiary outstanding as of the date hereof;
      

    

    (b)
      Indebtedness of the Company pursuant to the Notes issued at Closing or of any
      Subsidiary pursuant to the Subsidiary Guarantee;

    

    (c)
      Indebtedness of the Company owing to any Subsidiary; provided that any
      Indebtedness of the Company owing to any such Subsidiary is unsecured and is
      subordinated in right of payment from and after such time as the Notes shall
      become due and payable to the payment and performance of the Company’s
      obligations under the Notes; provided further that any disposition, pledge
      or
      transfer of any such Indebtedness to a Person (other than a disposition, pledge
      or transfer to the Company or another Subsidiary) shall be deemed to be an
      incurrence of such Indebtedness by the Company not permitted by this clause
      (c);

    

    (d)
      Indebtedness of a Subsidiary owing to the Company or to another Subsidiary;
      provided that any such Indebtedness of any Subsidiary is subordinated in right
      of payment to the Guaranty of such Subsidiary; provided further that any
      disposition, pledge or transfer of any such Indebtedness to a Person (other
      than
      a disposition, pledge or transfer to the Company or a Subsidiary) shall be
      deemed to be an incurrence of such Indebtedness by such Subsidiary not permitted
      by this clause (d);

    

    (e)
      Indebtedness of the Company or any Subsidiary in respect of purchase money
      obligations, Capitalized Lease Obligations of the Company or any Subsidiary
      and
      Subordinated Indebtedness of the Company or any Subsidiary in an aggregate
      amount which does not exceed $5 million at any one time
      outstanding;

    

    (f)
      Indebtedness of the Company or any Subsidiary consisting of guarantees,
      indemnities or obligations in respect of purchase price adjustments in
      connection with the acquisition or disposition of assets, including, without
      limitation, shares of capital stock of Subsidiaries; 

    

    (g)
      Indebtedness of the Company or any Subsidiary represented by (x) letters of
      credit for the account of the Company or any Subsidiary or (y) other obligations
      to reimburse third parties pursuant to any surety bond or other similar
      arrangements, which letters of credit or other obligations, as the case may
      be,
      are intended to provide security for workers’ compensation claims, payment
      obligations in connection with self-insurance or other similar requirements
      in
      the ordinary course of business; and

    

    (h)
      Any
      renewals, extensions, substitutions, refinancings or replacements (each, for
      purposes of this clause, a “refinancing”) of any Indebtedness, referred to
      herein, including any successive refinancings, so long as (i) any such new
      Indebtedness shall be in a principal amount that does not exceed the principal
      amount (or, if such Indebtedness being refinanced provides for an amount less
      than the principal amount thereof to be due and payable upon a declaration
      of
      acceleration thereof, such lesser amount as of the date of determination) so
      refinanced, plus the lesser of the amount of any premium required to be paid
      in
      connection with such refinancing pursuant to the terms of the Indebtedness
      refinanced or the amount of any premium
      reasonably determined as necessary to accomplish such refinancing, (ii) in
      the
      case of any refinancing by the Company of Subordinated Indebtedness, such new
      Indebtedness is made pari passu with or subordinate to the Notes at least to
      the
      same extent as the Indebtedness being refinanced, and (iii) in the case of
      any
      refinancing by any Subsidiary of Subordinated Indebtedness, such new
      Indebtedness is made pari passu with or subordinate to the Guaranty of such
      Guarantor at least to the same extent as the Indebtedness being
      refinanced.

    

     

    
      
        
        

      

      
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    “Person”
      means an individual, partnership, corporation, limited liability company,
      association, trust, unincorporated organization, or a government or agency
      or
      political subdivision thereof.

     

    “Prepayment
      Shares” is defined in Section 7.2(d).

     

    “Principal
      Shares” is defined in Section 7.1.

     

    “Property”
      or “properties” means, unless otherwise specifically limited, real or personal
      property of any kind, tangible or intangible, choate or inchoate.

     

    “Purchasers”
      means the purchasers of the Units named in Schedule
      A
      hereto.

     

    “Required
      Holders” means, at any time, the holders of at least 51% in principal amount of
      the Notes at the time outstanding (exclusive of Notes then owned by the Company
      or any of its Affiliates).

     

    “Responsible
      Officer” means any officer of the Company with responsibility for the
      administration of the relevant portion of this Agreement.

     

    “Sale
      and
      Leaseback Transaction” means any transaction or series of related transactions
      pursuant to which the Company or a Subsidiary sells or transfers any property
      or
      asset in connection with the leasing of such property or asset to the seller
      or
      transferor.

     

    “SEC”
      means the Securities and Exchange Commission.

     

    “Securities
      Act” means the Securities Act of 1933, as amended from time to
      time.

     

    “Senior
      Indebtedness” means the principal of, premium, if any, and interest on all other
      Indebtedness of the Company (other than the Notes), whether outstanding on
      the
      date of Closing or thereafter created, incurred or assumed, unless, in the
      case
      of any particular Indebtedness, the instrument creating or evidencing the same
      or pursuant to which the same is outstanding expressly provides that such
      Indebtedness shall not be senior in right of payment to the Notes.
 Notwithstanding the foregoing, “Senior Indebtedness” shall not include (i)
      Indebtedness evidenced by the Notes, (ii) Indebtedness of the Company that
      is
      expressly subordinated in right of payment to any Senior Indebtedness of the
      Company or the Notes, (iii) Indebtedness of the Company that by operation of
      law
      is subordinate to any general unsecured obligations of the Company, (iv)
      Indebtedness of the Company to the extent incurred in violation of any covenant
      of this Agreement, (v) any liability for federal, state or local taxes or other
      taxes, owed or owing by the Company, (vi) Indebtedness for goods, materials
      or
      services purchased in the ordinary course of business or Indebtedness consisting
      of trade account payables or other current liabilities (other than the current
      portion of long-term Indebtedness which would constitute Senior Indebtedness
      but
      for the operation of this clause (vi)), (vii) amounts owed by the Company for
      compensation to employees or for services rendered to the Company, (viii)
      Indebtedness of the Company to any Subsidiary or any other Affiliate of the
      Company or any such Affiliate’s Subsidiaries, (ix) amounts owing under leases
      and (x) Indebtedness which when incurred and without respect to any election
      under Section 1111(b) of Title 11 of the United States Code is without recourse
      to the Company or any Subsidiary.

     

    
      
        
        

      

      
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    “Subordinated
      Indebtedness” means, as of the date of any determination thereof, all unsecured
      Indebtedness of the Company which shall contain or have applicable thereto
      subordination provisions providing for the subordination thereof to other the
      Indebtedness of the Company (including, without limitation, the
      Notes).

     

    “Subsidiary”
      means, as to any Person, any corporation, association or other business entity
      in which such Person or one or more of its Subsidiaries or such Person and
      one
      or more of its Subsidiaries owns sufficient equity or voting interests to enable
      it or them (as a group) ordinarily, in the absence of contingencies, to elect
      a
      majority of the directors (or Persons performing similar functions) of such
      entity, and any partnership or joint venture if more than a 50% interest in
      the
      profits or capital thereof is owned by such Person or one or more of its
      Subsidiaries or such Person and one or more of its Subsidiaries (unless such
      partnership can and does ordinarily take major business actions without the
      prior approval of such Person or one or more of its Subsidiaries).  Unless
      the context otherwise clearly requires, any reference to a “Subsidiary” is a
      reference to a Subsidiary of the Company.

     

    “Subsidiary
      Guarantee” is defined in Section 3.2.

     

    “Transaction
      Shares” means collectively, the Principal Shares, the Interest Shares, the
      Prepayment Shares and the Warrant Shares.

     

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

     

    SECTION
      2.  AUTHORIZATION OF UNITS.

     

    3.1 Units.
       Subject to the terms and conditions of this Agreement, the Company will
      issue and sell to each Purchaser and each Purchaser will purchase from the
      Company, at the Closing provided for in Section 4, such number of Units
      specified opposite such Purchaser's name in Schedule
      A
      at the
      aggregate Subscription Price.  The obligations of each Purchaser hereunder
      are several and not joint obligations and each Purchaser shall have no obligation
      and no liability to any Person for the performance or nonperformance by any
      other Purchaser hereunder.

     

    
      
        
        

      

      
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    3.2 Subsidiary
      Guarantee.
       The payment by the Company of all amounts due with respect to the Notes
      and the performance by the Company of its obligations under this Agreement
      will
      be unconditionally guaranteed by all Eligible Subsidiaries of the Company (the
      “Guarantors”) under the subsidiary guarantee (the “Subsidiary Guarantee”) which
      shall be in substantially the form attached hereto as Exhibit
      C.

    

    SECTION
      4.  CLOSING.

     

    The
      sale
      and purchase of the Units to be purchased by each Purchaser shall occur at
      10:00
      am Miami time, at a closing (the “Closing”) on August 5, 2003 or on such other
      Business Day as may be agreed upon by the Company and the Purchasers.  At
      the Closing, the Company will deliver to J. Giordano Securities, LLC, as agent
      for each Purchaser, the Units to be purchased by such Purchaser dated the date
      of the Closing and registered in such Purchaser's name, against delivery by
      such
      Purchaser to the Company or its order of immediately available funds in the
      amount of the Subscription Price therefor by wire transfer of immediately
      available funds for the account of the Company to account number 9660323321,
      account name 21st
      Century
      Holding Company Operating, at Union Planters Bank, ABA Number 067008414.
 If at the Closing the Company shall fail to tender such Units to any
      Purchaser as provided above in this Section 4, such Purchaser shall, at such
      Purchaser's election, be relieved of all further obligations under this
      Agreement, without thereby waiving any rights such Purchaser may have by reason
      of such failure or such nonfulfillment.

     

    SECTION
      5.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     

    The
      Company represents and warrants to each Purchaser that:

     

    5.1 Organization.
       The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of Florida with full power and authority to own, lease, license
      and use its properties and assets and to carry out the businesses in which
      it is
      engaged in.  The Company is duly qualified to transact the business in
      which it is engaged and is in good standing as a foreign corporation in every
      jurisdiction in which its ownership, leasing, licensing or use of property
      or
      assets or the conduct of its business make such qualification necessary, except
      where the failure to be so qualified would not individually or in the aggregate
      have a Material Adverse Effect.

    

    5.2 Power
      and Authorization.  The
      Company has all requisite power and authority to (i) execute, deliver and
      perform its obligations under this Agreement; and (ii) to issue and sell the
      Units.  All necessary corporate proceedings of the Company have been duly
      taken to authorize the execution, delivery, and performance of this Agreement.
       This Agreement has been duly authorized by the Company and, when executed
      and delivered by the Company, will constitute the legal, valid and binding
      obligation of the Company enforceable against the Company in accordance with
      its
      terms, except (i) as such enforceability may be limited by bankruptcy,
      insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
      affecting creditors’ rights generally; (ii) as enforceability of any
      indemnification, contribution or exculpation
      provision may be limited under applicable federal and state securities laws;
      and
      (iii) that the remedy of specific performance and injunctive and other forms
      of
      equitable relief may be subject to the equitable defenses and to the discretion
      of the court before which any proceeding therefor may be
      brought.

     

    
      
        
        

      

      
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    5.3 Public
      Disclosure.
       The Company has filed with the SEC a registration statement on Form S-3
      (the “Form S-3”), which is currently being reviewed by the SEC.  In
      connection with the review of the Form S-3, the SEC is also reviewing the
      Company’s Annual Report on Form 10-K for the year ended December 31, 2002 (the
“Form 10-K”) and its Quarterly Report on Form 10-Q for the quarter ended March
      31, 2003 (the “Form 10-Q”).  As a result, the Company’s Form 10-K and Form
      10-Q may be amended subsequent to the date hereof in response to comments
      received from the SEC.  Notwithstanding the foregoing, as of their
      respective filing dates, none of the Company’s filings with the SEC (the “Public
      Filings”) contained any untrue statement of a material fact or omitted any
      material fact required to be stated therein or necessary to make the statements
      made therein, in light of the circumstances in which they were made, not
      misleading, except to the extent such filings have been prior to the date hereof
      corrected, updated or superseded by a document subsequently filed with the
      SEC.

    

    SECTION
      6.  REPRESENTATIONS OF THE PURCHASER.

     

    Each
      Purchaser hereby represents and warrants to, and agrees with, the Company as
      follows:

    

    6.1 It
      is an
“accredited investor” as that term is defined in Rule 501(a) of Regulation D
      promulgated under the Securities Act.

    

    6.2 If
      a
      natural person, the Purchaser is: a bona fide resident of the state contained
      in
      the address set forth on Schedule
      A
      as the
      Purchaser’s home address; at least 21 years of age; and legally competent to
      execute this Agreement.  If an entity, the Purchaser is duly authorized to
      execute this Agreement and this Agreement constitutes the legal, valid and
      binding obligation of the Purchaser enforceable against the Purchaser in
      accordance with its terms.

    

    6.3 The
      Purchaser is familiar with the Company’s business, plans and financial
      condition, the terms of the offering of the Units (the “Offering”), and any
      other matters relating to the Offering; the Purchaser has received all materials
      that have been requested by the Purchaser; the Purchaser has had a reasonable
      opportunity to ask questions of the Company and its representatives; and the
      Company has answered all inquiries that the Purchaser or the Purchaser’s
      representatives have put to it.  The Purchaser has had access to all
      additional non-confidential information necessary to verify the accuracy of
      the
      information set forth in this Agreement and any other materials furnished
      herewith, and has taken all the steps necessary to evaluate the merits and
      risks
      of an investment as proposed hereunder.  Without limiting the foregoing,
      the Purchaser acknowledges that it has reviewed certain information regarding
      the Company, its business and the terms of this Offering, including but limited
      to, the information contained in the Offering Document dated July 22, 2003
      (the
“Offering Document”).  The Purchaser acknowledges it has been advised by
      the Company that the SEC is reviewing the Company’s Public Filings, including
      the Form 10-K, and as a result the Company’s Public Filings may be
      amended.

     

    
      
        
        

      

      
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    6.4 The
      Purchaser has such knowledge and experience in finance, securities, investments
      and other business matters so as to be able to protect the interests of the
      Purchaser in connection with this transaction, and the Purchaser’s investment in
      the Company hereunder is not material when compared to the Purchaser’s total
      financial capacity.

    

    6.5 The
      Purchaser understands the various risks of an investment in the Company as
      proposed herein, including without limitation those set forth in the Offering
      Document and in the Public Filings, and can afford to bear such risks,
      including, without limitation, the risks of losing the entire
      investment.

    

    6.6 The
      Purchaser acknowledges that no market for the Units currently exists and none
      may develop in the future and that the Purchaser may find it impossible to
      liquidate the investment at a time when it may be desirable to do so, or at
      any
      other time.

    

    6.7 The
      Purchaser has been advised by the Company that the Units have not been
      registered under the Securities Act, that the Securities will be issued on
      the
      basis of the statutory exemption provided by Section 4(2) of the Securities
      Act
      or Regulation D promulgated thereunder, or both, relating to transactions by
      an
      issuer not involving any public offering and under exemptions under certain
      state securities laws, that this transaction has not been reviewed by, passed
      on
      or submitted to any federal or state agency or self-regulatory organization
      where an exemption is being relied upon, and that the Company’s reliance thereon
      is based in part upon the representations made by the Purchaser in this
      Agreement.  The Purchaser acknowledges that the Purchaser has been informed
      by the Company of, or is otherwise familiar with, the nature of the limitations
      imposed by the Securities Act and the rules and regulations thereunder on the
      transfer of the Units.  In particular, the Purchaser agrees that the
      Company shall not be required to give any effect to sale, assignment or
      transfer, unless (i) the sale, assignment or transfer of such Units is
      registered under the Securities Act, it being understood that the Units are
      not
      currently registered for sale and that the Company has no obligation or
      intention to so register the Securities except as set forth herein, or (ii)
      such
      Units are sold, assigned or transferred in accordance with all the requirements
      and limitations of Rule 144 under the Securities Act, or (iii) such sale,
      assignment or transfer is otherwise exempt from registration under the
      Securities Act.  The Purchaser further understands that an opinion of
      counsel and other documents may be required to transfer the Units.  The
      Purchaser acknowledges that the Units shall be subject to stop transfer orders
      and the certificate or certificates evidencing any Units shall bear the
      following or a substantially similar legend or such other legend as may appear
      on the forms of Units and such other legends as may be required by state blue
      sky laws:

    

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE OR
      FOREIGN SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN
      MAY
      BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A
      REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES
      ACT AND ANY APPLICABLE STATE OR FOREIGN SECURITIES LAWS, OR (2) THE COMPANY
      RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL
      AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES
      MAY
      BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED
      WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
      APPLICABLE STATE OR FOREIGN SECURITIES LAWS.”

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    6.8 The
      Purchaser will acquire the Units for the Purchaser’s own account (or for the
      joint account of the Purchaser and the Purchaser’s spouse either in joint
      tenancy, tenancy by the entirety or tenancy in common) for investment and not
      with a view to the sale or distribution thereof or the granting of any
      participation therein, and has no present intention of distributing or selling
      to others any of such interest or granting any participation
      therein.

    

    6.9 Neither
      the Company nor any of the officers, directors, shareholders, partners,
      employees or agents of either, or any other Persons, whether expressly or by
      implication, have represented, guaranteed or warranted that,

    

    (a) The
      Company or the Purchaser will realize any given percentage of profits and/or
      amount or type of consideration, profit or loss as a result of the Company’s
      activities or the Purchaser’s investment in the Company; or

    

    (b) the
      past
      performance or experience of the management of the Company, or of any other
      person, will in any way indicate the predictable results of the ownership of
      the
      Units or of the Company’s activities.

    

    6.10 No
      oral
      or written representations have been made other than as stated in this
      Agreement, the Offering Document, and the Executive Summary dated June 2003
      (the
“Executive Summary”), and the Purchaser has not relied on any oral or written
      representation from the Company other than as set forth in this Agreement and
      the Offering Document in making its investment decision.  The Purchaser
      hereby acknowledges that the information and representations set forth in this
      Agreement and the Offering Document supersede all prior information and
      representations provided to the Purchaser in connection with the Offering,
      including without limitation those set forth in the Executive
      Summary.

    

    6.11 The
      Purchaser is not purchasing for the Units as a result of or subsequent to any
      advertisement, article, notice or other communication published in any
      newspaper, magazine or similar media or broadcast over television or radio,
      or
      presented at any seminar or meeting.

    

    6.12 The
      Purchaser is not relying on the Company with respect to the tax and other
      economic considerations of an investment.

    

    6.13 The
      Purchaser understands that the net proceeds from the Offering (after deduction
      for expenses of the Offering) will be used in all material respects for the
      purposes set forth in the Offering Document.

    

    6.14 The
      Purchaser acknowledges that the representations, warranties and agreements
      made
      by the Purchaser herein shall survive the execution and delivery of this
      Agreement and the purchase of the Units.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    6.15 Blue
      Sky
      matters:

    

    THE
      UNITS
      HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF
      ANY
      STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS.  THE UNITS
      HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES
      COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OTHER FOREGOING
      AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING.  ANY
      REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

    

    THE
      UNITS
      ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
      TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND
      APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
      THEREFROM. SUBSCRIBERS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
      FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
      TIME.

    

    6.16 The
      Purchaser agrees to use its reasonable best efforts to make all warranties
      and
      representations required by the securities laws of Purchaser’s jurisdiction of
      domicile necessary to enable the Company to issue the Transaction Shares in
      compliance with such securities laws.

    

    6.17 The
      Purchaser acknowledges that as a result of its investment hereunder it may
      become subject to the reporting requirements of Sections 13 and 16 of the
      Exchange Act.  In the event that Purchaser becomes subject to the reporting
      requirements of Sections 13 and 16, Purchaser agrees to file a Schedule 13-D
      and
      a Form 3 no later than 10 days from the Closing and to keep current such filings
      in accordance with the requirements of Sections 13 and 16.

    

    6.18 The
      Purchaser has consulted his own financial, legal and tax advisors with respect
      to the economic, legal and tax consequences of an investment in the Units and
      has not relied on the Company, its officers, directors or professional advisors
      for advice as to such consequences.

    

    SECTION
      7.  PAYMENT OF THE NOTES.

     

    7.1 Required
      Payments.
       The principal amount of the Notes shall be due and payable in equal
      quarterly installments commencing on October 31, 2003 with the last installment
      due on July 31, 2006 (the “Maturity Date”).  Each principal payment shall
      be paid in United States dollars or, to the extent legally permitted, in shares
      of Common Stock (the “Principal Shares”), at the Company’s option; provided,
      however, that the Company may only elect to make principal payments in Principal
      Shares if at the time of the payment an effective registration statement
      covering the issuance of the Principal Shares shall be available to the Company;
      and provided further, that the Company shall make principal payments in
      Principal Shares only to the extent provided in Section 12 hereof.  If such
      principal payment is paid in Principal Shares, then the number of Principal
      Shares to be issued on account of the principal payment shall be equal to the
      amount of the principal payment due divided by 95% of the weighted-average
      volume price for the Common Stock on Nasdaq as reported by Bloomberg Financial
      Markets (“Bloomberg”) for the 20 consecutive trading days prior to the date of
      the principal
      payment.  In the event the Company elects to pay the principal amount due
      in Principal Shares it shall notify the Holder of its election no later than
      15
      days prior to the commencement of the 20 consecutive trading day period
      referenced above.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    7.2 Change
      in Control.

    

    (a) Notice
      of Change in Control or Control Event.
       The Company will, within 15 Business Days after any Responsible Officer
      has knowledge of the occurrence of any Change in Control or Control Event
      (subject in the case of any Control Event to contractual limitations on
      disclosure and disclosure limitations imposed by applicable securities laws),
      give written notice of such Change in Control or Control Event to each holder
      of
      Notes unless notice in respect of such Change in Control (or the Change in
      Control contemplated by such Control Event) shall have been given pursuant
      to
      this Section 7.2. If a Change in Control has occurred, such notice shall contain
      and constitute an offer to prepay Notes as described in of this Section 7.2
      and
      shall be accompanied by the certificate described in this Section
      7.2.

    

    (b) Offer
      to Prepay Notes.
       The offer to prepay Notes contemplated by this Section 7.2(b) shall be an
      offer to prepay, in accordance with and subject to this Section 7.2, all, but
      not less than all, the Notes held by each holder (in this case only, “holder” in
      respect of any Note registered in the name of a nominee for a disclosed
      beneficial owner shall mean such beneficial owner) on a date specified in such
      offer (the “Proposed Prepayment Date”).  If such Proposed Prepayment Date
      is in connection with an offer contemplated by this Section 7.2, such date
      shall
      be not less than 30 days and not more than 60 days after the date of such offer
      (if the Proposed Prepayment Date shall not be specified in such offer, the
      Proposed Prepayment Date shall be the 30th day after the date of such
      offer).

    

    (c) Acceptance.
 A
      holder of Notes may accept the offer to prepay made pursuant to this Section
      7.2
      by causing a notice of such acceptance to be delivered to the Company at least
      15 days prior to the Proposed Prepayment Date.  A failure by a holder of
      Notes to respond to an offer to prepay made pursuant to this Section 7.2 shall
      be deemed to constitute a rejection of such offer by such holder.

    

    (d) Prepayment.
       Prepayment of the Notes to be prepaid pursuant to this Section 7.2 shall
      be at 101% of the then-outstanding principal amount of such Notes together
      with
      interest on such Notes accrued to the date of prepayment (the “Change in Control
      Prepayment”).  The prepayment shall be made on the Proposed Prepayment Date
      except as provided in Section 7.2(e).  The Company may pay the Change in
      Control Prepayment in United States dollars or in shares of Common Stock (the
      “Prepayment Shares”), at the Company’s option; provided, however, that the
      Company may only elect to pay the Change in Control Prepayment in Prepayment
      Shares if at the time of payment an effective registration statement covering
      the issuance of the Prepayment Shares shall be available to the Company; and
      provided further, that the Company shall pay the Change in Control Prepayment
      in
      Prepayment Shares only to the extent provided in Section 12 hereof.  If the
      Change in Control Prepayment is paid in Prepayment Shares, then the number
      of
      Prepayment Shares to be issued on account of the prepayment shall be equal
      to
      the amount of the Change in Control Prepayment divided by 95% of the
      weighted-average volume price for the Common Stock on Nasdaq as reported by
      Bloomberg for the 20 consecutive trading days prior to the date of the Proposed
      Prepayment Date.
       In the event the Company elects to pay the Change in Control Prepayment in
      Prepayment Shares, it shall notify the Holder of its election no later than
      15
      days prior to the commencement of the 20 consecutive trading day period
      referenced above.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (e) Deferral
      Pending Change in Control.
       The obligation of the Company to prepay Notes pursuant to the offer
      required by this Section 7.2 is subject to the occurrence of the Change in
      Control in respect of which such offer and acceptance shall have been made.
       In the event that such Change in Control does not occur on the Proposed
      Prepayment Date in respect thereof, the prepayment shall be deferred until,
      and
      shall be made on the date on which, such Change in Control occurs.  The
      Company shall keep each holder of Notes reasonably and timely informed of (i)
      any such deferral of the date of prepayment, (ii) the date on which such Change
      in Control and the prepayment are expected to occur, and (iii) any determination
      by the Company that efforts to effect such Change in Control have ceased or
      been
      abandoned (in which case the offers and acceptances made pursuant to this
      Section 7.2 in respect of such Change in Control shall be deemed
      rescinded).

    

    (f) Content
      of Offer.
       Each offer to prepay the Notes pursuant to this Section 7.2 shall,
      specify:

    

      (i)    the
        Proposed Prepayment Date;

      

      (ii)    that
        such offer is made pursuant to this Section 7.2;

      

      (iii)    the
        principal amount of each Note offered to be prepaid;

      

      (iv)    the
        interest that would be due on each Note offered to be prepaid, accrued to
        the
        Proposed Prepayment Date;

      

      (v)    that
        the conditions of this Section 7.2 have been fulfilled; and

      

      (vi)    in
        reasonable detail, the nature and date or proposed date of the Change in
        Control.

       

    

     

    (g) “Change
      in Control” Defined.
       “Change in Control” means each and every issue, sale or other disposition
      of shares of stock of the Company which results in any person (as such term
      is
      used in Section 13(d) and Section 14(d)(2) of the Exchange Act) or related
      persons constituting a group (as such term is used in Rule 13d-5 under the
      Exchange Act) (herein, an “Acquiring Person”) becoming the “beneficial owners”
(as such term is used in Rule 13d-3 under the Exchange Act as in effect on
      the
      date of the Closing), directly or indirectly, of more than 50% (by total voting
      power) of the issued and outstanding capital stock of the Company which is
      entitled to vote in the election of the members of the Company's board of
      directors.

    

    (h) “Control
      Event” Defined.
       “Control Event” means:

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (i) the
      execution by the Company or any of its Subsidiaries or Affiliates of any
      agreement or letter of intent with respect to any proposed transaction or event
      or series of transactions or events which, individually or in the aggregate,
      may
      reasonably be expected to result in a Change in Control, or 

    

    (ii) the
      execution of any written agreement which, when fully performed by the parties
      thereto, would result in a Change in Control.

    

     

    SECTION
      8.  SUBORDINATION OF NOTES AND GUARANTY. 

     

    8.1 Notes
      Subordinate to Senior Indebtedness.
       The Company covenants and agrees, and each Purchaser of a Note, by its
      acceptance thereof, likewise covenants and agrees, for the benefit of the
      holders, from time to time, of Senior Indebtedness that, to the extent and
      in
      the manner hereinafter set forth in this Section, the Indebtedness represented
      by the Notes and the payment of the principal of (and premium, if any) and
      interest on each and all of the Notes are hereby expressly made subordinate
      and
      subject in right of payment as provided in this Section to the prior payment
      in
      full in cash or cash equivalents or in any other form acceptable to each holder
      of Senior Indebtedness, of all Senior Indebtedness; provided,
      however,
      that
      the Notes, the Indebtedness represented thereby and the payment of the principal
      of (and premium, if any) and interest on the Notes in all respects shall rank
      equally with, or prior to, all existing and future senior subordinated
      indebtedness (including, without limitation, Indebtedness) of the Company that
      is subordinated to Senior Indebtedness.

    

    8.2 Subordination
      of Guaranty.
       The Guaranty issued by any Guarantor will be unsecured senior subordinated
      obligations of such Guarantor, ranking pari
      passu
      with all
      other existing and future senior subordinated indebtedness of such Guarantor,
      if
      any.  The Indebtedness evidenced by such Subsidiary Guarantee will be
      subordinated on the same basis as the guaranty of any Senior Indebtedness of
      such Guarantor as the Notes are subordinated to Senior
      Indebtedness.

     

    SECTION
      9.  PAYMENT OF INTEREST.

     

    9.1 The
      principal amount of the Notes outstanding shall bear interest at the rate of
      6%
      per annum beginning on the date of issuance.  Interest shall be payable
      quarterly beginning on October 31, 2003.  Each interest payment shall be
      paid in United States dollars or, to the extent legally permitted, in shares
      of
      Common Stock (the “Interest Shares”), at the Company’s option; provided,
      however, that the Company may only elect to make interest payments in Interest
      Shares if at the time of payment an effective registration statement covering
      the issuance of the Interest Shares shall be available to the Company; and
      provided further, that the Company shall make interest payments in Interest
      Shares only to the extent provided in Section 12 hereof.  If such interest
      payment is paid in Interest Shares, then the number of Interest Shares to be
      issued on account of the interest payment shall be equal to the amount of the
      interest payment due divided by 95% of the weighted-average volume price for
      the
      Common Stock on Nasdaq as reported by Bloomberg for the 20 consecutive trading
      days prior to the date of the interest payment.  In the event the Company
      elects to pay the interest amount due in Interest Shares it shall notify the
      Holder of its election no later than 15 days prior to the commencement of the
      20
      consecutive trading day period referenced above.

     

    
      
        
        

      

      
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    SECTION
      10.  NEGATIVE COVENANTS.

     

    The
      Company covenants that so long as any of the Notes are outstanding:

     

    10.1 Limitation
      on Liens.
       The Company will not, and will not permit any of its Subsidiaries to,
      directly or indirectly create, incur, assume or permit to exist (upon the
      happening of a contingency or otherwise), any Lien on or with respect to any
      property or asset (including, without limitation, any document or instrument
      in
      respect of goods or accounts receivable) of the Company or any such Subsidiary,
      whether now owned or held or hereafter acquired, or any income or profits
      therefrom, or assign or otherwise convey any right to receive income or profits
      except:

    

    (a) Liens
      for
      taxes, assessments or other governmental charges which are not yet due and
      payable;

    

    (b) Liens
      incidental to the conduct of business or the ownership of properties and assets
      (including landlords', carriers', warehousemen's, mechanics', materialmen's
      and
      other similar Liens) and Liens to secure the performance of bids, tenders,
      leases, or trade contracts, or to secure statutory obligations (including
      obligations under workers compensation, unemployment insurance and other social
      security legislation), surety or appeal bonds or other Liens incurred in the
      ordinary course of business and not in connection with the borrowing of
      money;

    

    (c) leases
      or
      subleases entered into by the Company or its Subsidiaries as either lessors
      or
      sublessors, easements, rights-of-way, restrictions and other similar charges
      or
      encumbrances (including zoning restrictions), in each case incidental to the
      ownership of property or assets or the ordinary conduct of the business of
      the
      Company or any of its Subsidiaries, provided that such Liens do not, in the
      aggregate, detract from the value of such property in any material
      way;

    

    (d) Liens
      incidental to minor survey exceptions and similar Liens, provided that such
      Liens do not, in the aggregate, materially detract from the value of such
      property;

    

    (e) Liens
      on
      property or assets of Subsidiaries securing Indebtedness owing to the Company
      or
      to another Subsidiary;

    

    (f) Liens
      existing on the date of Closing which secure outstanding Indebtedness of the
      Company and its Subsidiaries;

    

    (g) any
      Lien
      existing on property of a Person immediately prior to its being consolidated
      with or merged into the Company or a Subsidiary or its becoming a Subsidiary,
      or
      any Lien existing on any property acquired by the Company or any Subsidiary
      at
      the time such property is so acquired (whether or not the Indebtedness secured
      thereby shall have been assumed; and

    

    (h) any
      extensions, renewals or replacements of any Lien permitted by the preceding
      subparagraphs of this Section 10.1, provided that (i) no additional property
      shall be encumbered by such Liens, (ii) the unpaid principal amount of the
      Indebtedness secured thereby shall
      not
      be increased prior to or on or after the date of any extension, renewal or
      replacement, (iii) the weighted average life to maturity of the Indebtedness
      secured by such Liens shall not be reduced, and (iv) at such time and
      immediately after giving effect thereto, no Default or Event of Default would
      exist.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    10.2 Merger,
      Consolidation.
       The Company will not, and will not permit any Subsidiary to, consolidate
      with or be a party to a merger with any other Person; provided, however,
      that:

    

    (a) any
      Subsidiary may merge or consolidate with or into the Company, so long as in
      any
      merger or consolidation involving the Company, the Company shall be the
      surviving entity;

    

    (b) any
      Subsidiary may merge or consolidate with or into any other Person if either
      (x)
      the Subsidiary shall be the surviving entity, or (y) if the Subsidiary is not
      the surviving entity, such transaction is permitted by Section 10.3;
      and

    

    (c) the
      Company may consolidate or merge with any other Person if (i) either (x) the
      Company shall be the surviving entity, or (y) if the surviving entity is other
      than the Company, such entity expressly assumes, by written agreement
      satisfactory in scope and form to the Required Holders, all obligations of
      the
      Company under the Notes, the Warrants and this Agreement, and (ii) at the time
      of such consolidation or merger and after giving effect thereto, no Default
      or
      Event of Default shall have occurred and be continuing.

    

    10.3 Sales
      of Assets.
       The Company will not, and will not permit any Subsidiary to, sell, lease
      or otherwise dispose of substantially all of the assets of the Company and
      its
      Subsidiaries unless the consideration received by the Company or such Subsidiary
      for such sale is not less than the Fair Market Value of the assets sold (as
      determined by the Board of Directors of the Company, whose determination shall
      be conclusive and evidenced by a Board Resolution).

    

    10.4 Transactions
      with Affiliates.
       The Company will not, and will not permit any Subsidiary to enter into,
      directly or indirectly, any Material transaction or Material group of related
      transactions (including without limitation the purchase, lease, sale or exchange
      of properties of any kind or the rendering of any service) with any Affiliate
      (other than the Company or another Subsidiary), except upon fair and reasonable
      terms no less favorable to the Company or such Subsidiary than would be
      obtainable in a comparable arm's-length transaction with a Person not an
      Affiliate.

    

    10.5 Limitation
      on Indebtedness. The
      Company will not, and will not permit any Subsidiary to, create, issue, assume,
      guarantee or in any manner become directly or indirectly liable for the payment
      of, or otherwise incur (collectively, “incur”), any Indebtedness (including any
      Acquired Indebtedness), other than Permitted Indebtedness.

    

    10.6 Limitation
      on Restricted Payments.

    

    (a) The
      Company will not, and will not permit any Subsidiary to, directly or
      indirectly:

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (i) declare
      or pay any dividend on, or make any distribution to holders of, any shares
      of
      the Common Stock of the Company or any Subsidiary (other than the declaration
      or
      payment of dividends or distributions to the extent declared or paid to the
      Company or any Subsidiary or in accordance with the Company’s current dividend
      payment policy);

    

    (ii) purchase,
      redeem or otherwise acquire or retire for value, directly or indirectly, any
      shares of Common Stock of the Company or any Affiliate of the Company (other
      than Common Stock of any Subsidiary) or any options, warrants or other rights
      to
      acquire such shares of Common Stock; or

    

    (iii) make
      any
      principal payment on, or repurchase, redeem, defease or otherwise acquire or
      retire for value, prior to any scheduled principal payment, sinking fund payment
      or maturity, any Subordinated Indebtedness of the Company or any
      Subsidiary.

    

    10.7 Limitation
      on Sale and Leaseback Transactions. The
      Company shall not, and shall not permit any Subsidiary to, directly or
      indirectly, enter into any Sale and Leaseback Transaction with respect to any
      property or assets (whether now owned or hereafter acquired), unless (i) the
      sale or transfer of such property or assets to be leased is treated as a sale
      of
      assets and the Company complies with Section 10.3, and (ii) the Company or
      such
      Subsidiary would be permitted to incur Indebtedness under Section 10.5 in the
      amount of the Capitalized Lease Obligations incurred in respect of such Sale
      and
      Leaseback Transaction.

     

    SECTION
      11.  EVENTS OF DEFAULT.

     

    An
“Event
      of Default” shall exist if any of the following conditions or events shall occur
      and be continuing:

     

    (a) the
      Company defaults in the payment of any principal on any Note for more than
      10
      Business Days after the same becomes due and payable, whether at maturity or
      at
      a date fixed for prepayment or by declaration or otherwise; or

    

    (b) the
      Company defaults in the payment of any interest on any Note for more than five
      Business Days after the same becomes due and payable, whether at a date fixed
      for payment or by declaration or otherwise; or

    

    (c) the
      Company defaults in the performance of or compliance with any Material terms
      contained herein and such default is not remedied within 30 days after receipt
      of written notice from the Required Holders of such default; or

    

    (d) any
      representation or warranty made in writing by or on behalf of the Company or
      any
      Guarantor or by any officer of the Company or any Guarantor in this Agreement,
      any or in any writing furnished in connection with the transactions contemplated
      hereby or thereby proves to have been false or incorrect in any Material respect
      on the date as of which made; or

    

    (e) the
      Company defaults in the payment of any principal or interest on any Indebtedness
      of the Company, in any case in an amount in excess of $1,000,000, which default
      continues
      for more than the applicable cure period, if any, and/or is not waived in
      writing by the other party thereto;

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (f) the
      Company or any Guarantor (i) is generally not paying, or admits in writing
      its
      inability to pay, its debts as they become due, (ii) files, or consents by
      answer or otherwise to the filing against it of, a petition for relief or
      reorganization or arrangement or any other petition in bankruptcy, for
      liquidation or to take advantage of any bankruptcy, insolvency, reorganization,
      moratorium or other similar law of any jurisdiction, (iii) makes an assignment
      for the benefit of its creditors, (iv) consents to the appointment of a
      custodian, receiver, trustee or other officer with similar powers with respect
      to it or with respect to any substantial part of its property, (v) is
      adjudicated as insolvent or to be liquidated, or (vi) takes corporate action
      for
      the purpose of any of the foregoing; or

    

    (g) a
      court
      or governmental authority of competent jurisdiction enters an order appointing,
      without consent by the Company or any of the Guarantors, a custodian, receiver,
      trustee or other officer with similar powers with respect to it or with respect
      to any substantial part of its property, or constituting an order for relief
      or
      approving a petition for relief or reorganization or any other petition in
      bankruptcy or for liquidation or to take advantage of any bankruptcy or
      insolvency law of any jurisdiction, or ordering the dissolution, winding-up
      or
      liquidation of the Company or any of the Guarantors, or any such petition shall
      be filed against the Company or any of the Guarantors and such petition shall
      not be dismissed within 60 days.

     

    SECTION
      12.  LIMITATION ON ISSUANCE OF COMMON STOCK.

     

    Notwithstanding
      anything to the contrary contained herein or in the Offering Document, the
      Company shall not:

     

    (a) (i)
      Issue
      any of the Transaction Shares, or (ii) adjust the number of Warrant Shares
      in
      accordance with the terms of the Warrants, if such issuance or adjustment would,
      either individually or together with other one or more other issuances or
      adjustments, cause the issuance of shares of Common Stock to exceed the number
      of shares that the Company could then issue in compliance with Section 4350(i)
      of the rules and regulations of Nasdaq (the “Nasdaq Rules”) or any successor
      rule or regulation.  Under Section 4350(i) of the Nasdaq Rules, a company
      may not issue shares, and may not issue securities convertible into shares,
      where the shares issued could in the aggregate equal 20% or more of the voting
      power of the shares outstanding, without obtaining shareholder approval.
 The foregoing limitation shall only apply until such time as the Company
      obtains the requisite approval of its shareholders for the issuance of the
      Transaction Shares, as required by Section 4350(i) of the Nasdaq Rules or any
      successor rule or regulation.  The Company covenants and agrees that it
      shall include a proposal for the approval of the issuance of the Transaction
      Shares in the Company’s proxy statement for its 2004 annual meeting of
      shareholders, which the Company currently anticipates shall take place in June
      2004.  If, due to the foregoing limitation,  the Company cannot adjust
      the Warrant Shares as provided  in  Section 8.3 of the Warrant, then,
      subject to NASD approval, the Company agrees that the exercise price thereof
      shall be reduced to equal the Issuance Price(s) of the shares of Common Stock
      that triggered the adjustment pursuant to Section 8.3 of the
      Warrant.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (b) Issue
      any
      of the Transaction Shares, if such issuance would violate the securities laws
      of
      the jurisdiction in which any Purchaser receiving such shares is
      located.

     

    SECTION
      13.  REMEDIES ON DEFAULT, ETC.

     

    13.1 Acceleration.

    

    (a) If
      an
      Event of Default with respect to the Company described in Section 11 has
      occurred, all the Notes then outstanding may at any time thereafter at the
      Holder’s option, by notice or notices to the Company, be declared immediately
      due and payable.

    

    Upon
      any
      Note becoming due and payable under this Section 13.1, such Note will forthwith
      mature and the entire unpaid principal amount of such Note, plus (i) all accrued
      and unpaid interest thereon shall all be immediately due and payable, in each
      and every case without presentment, demand, protest or further notice, all
      of
      which are hereby waived.

     

    13.2 Other
      Remedies.
       If any Default or Event of Default has occurred and is continuing, and
      irrespective of whether any Notes have become or have been declared immediately
      due and payable under Section 13.1, the Required Holders at the time outstanding
      may proceed to protect and enforce the rights of the holders by an action at
      law, suit in equity or other appropriate proceeding, whether for the specific
      performance of any agreement contained herein or in any Note, or for an
      injunction against a violation of any of the terms hereof or thereof, or in
      aid
      of the exercise of any power granted hereby or thereby or by law or
      otherwise.

    

    13.3 Rescission.
       At any time after any Notes have been declared due and payable pursuant to
      Section 13.1, the holders of not less than 50% in principal amount of the Notes,
      taken individually, then outstanding, by written notice to the Company, may
      rescind and annul any such declaration and its consequences if (a) the Company
      has paid all overdue interest on the Notes and, all principal if any, on any
      Notes that are due and payable and are unpaid other than by reason of such
      declaration, (b) all Events of Default and Defaults, other than non-payment
      of
      amounts that have become due solely by reason of such declaration, have been
      cured or have been waived pursuant to Section 18, and (c) no judgment or
 decree has been entered for the payment of any monies due pursuant hereto
      or to any Notes.  No rescission and annulment under this Section 13.3 will
      extend to or affect any subsequent Event of Default or Default or impair any
      right consequent thereon.

    

    13.4 No
      Waivers or Election of Remedies, Expenses, Etc.  No
      course
      of dealing and no delay on the part of any holder of any Note in exercising
      any
      right, power or remedy shall operate as a waiver thereof or otherwise prejudice
      such holder's rights, powers or remedies.  No right, power or remedy
      conferred by this Agreement or by any Note upon any holder thereof shall be
      exclusive of any other right, power or remedy referred to herein or therein
      or
      now or hereafter available at law, in equity, by statute or otherwise.  The
      Company will pay to the holder of each Note on demand such further amount as
      shall be sufficient to cover all costs and expenses of such holder incurred
      in
      any enforcement or collection under this Section 12, including, without
      limitation, the reasonable attorneys' fees, expenses and disbursements for
      the
      holders.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    SECTION
      14.  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

     

    14.1 Registration
      of Notes.
       The Company shall keep at its principal executive office a register for
      the registration and registration of transfers of Notes.  The name and
      address of each holder of one or more Notes, each transfer thereof and the
      name
      and address of each transferee of one or more Notes shall be registered in
      such
      register.  Prior to due presentment for registration of transfer, the
      Person in whose name any Note shall be registered shall be deemed and treated
      as
      the owner and holder thereof for all purposes hereof, and the Company shall
      not
      be affected by any notice or knowledge to the contrary.

    

    14.2 Transfer
      and Exchange of Notes.
       Upon surrender of any Note at the principal executive office of the
      Company for registration of transfer or exchange (and in the case of a surrender
      for registration of transfer, duly endorsed or accompanied by a written
      instrument of transfer duly executed by the registered holder of such Note
      or
      its attorney duly authorized in writing and accompanied by the address for
      notices of each transferee of such Note or part thereof), the Company shall
      execute and deliver not more than five Business Days following surrender of
      such
      Note, at the Company's expense (except as provided below), one or more new
      Notes
      (as requested by the holder thereof) in exchange therefor, in an aggregate
      principal amount equal to the unpaid principal amount of the surrendered Note.
       Each such new Note shall be payable to such Person as such holder may
      request and shall be substantially in the form of the Note originally issued
      hereunder.  Each such new Note shall be dated and bear interest from the
      date to which interest shall have been paid on the surrendered Note or dated
      the
      date of the surrendered Note if no interest shall have been paid thereon.
 The Company may require payment of a sum sufficient to cover any stamp tax
      or governmental charge imposed in respect of any such transfer of Notes.
 Notes shall not be transferred in denominations of less than $100,000,
      provided that if necessary to enable the registration of transfer by a holder
      of
      its entire holding of Notes, one Note may be in a denomination of less than
      $100,000.  Any transferee, by its acceptance of a Note registered in its
      name (or the name of its nominee), shall be deemed to have made the
      representation set forth in Section 6.

    

    14.3 Replacement
      of Notes.
       Upon receipt by the Company of evidence reasonably satisfactory to it of
      the ownership of and the loss, theft, destruction or mutilation of any Note,
      and

    

    (a) in
      the
      case of loss, theft or destruction, of indemnity reasonably satisfactory to
      it
      (provided that if the holder of such Note is, or is a nominee for, an original
      Purchaser or another holder of a Note with a minimum net worth of at least
      $50,000,000, such Person's own unsecured agreement of indemnity shall be deemed
      to be satisfactory), or

    

    (b) in
      the
      case of mutilation, upon surrender and cancellation thereof, the Company at
      its
      own expense shall execute and deliver not more than five Business Days following
      satisfaction of such conditions, in lieu thereof, a new Note, dated and bearing
      interest from the date to which interest shall have been paid on such lost,
      stolen, destroyed or mutilated Note or dated the date of such lost, stolen,
      destroyed or mutilated Note if no interest shall have been paid
      thereon.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    SECTION
      15.  PAYMENTS ON NOTES.

     

    The
      Company will pay all sums becoming due on the Notes for principal, and interest
      by the method and at the address specified for such purpose for such Purchaser
      on Schedule
      A
      hereto
      or by such other method or at such other address as such Purchaser shall have
      from time to time specified to the Company in writing for such purpose, without
      the presentation or surrender of such Note or the making of any notation
      thereon, except that upon written request of the Company made concurrently
      with
      or reasonably promptly after payment or prepayment in full of any Note, such
      Purchaser shall surrender such Note for cancellation, reasonably promptly after
      any such request, to the Company at its principal executive office or at the
      place of payment most recently designated by the Company pursuant to Section
      19.
 Prior to any sale or other disposition of any Note held by any Purchaser,
      such Person will, at its election, either endorse thereon the amount of
      principal paid thereon and the last date to which interest has been paid thereon
      or surrender such Note to the Company in exchange for a new Note or Notes
      pursuant to Section 14.2.

     

    SECTION
      16. REGISTRATION
      RIGHTS.

     

    The
      Purchasers have entered into a registration rights agreement (the “Registration
      Rights Agreement”) pursuant to which the Company has agreed to grant Purchasers
      certain registration
      rights with respect to the resale of the Transaction Shares and the
      Warrants.

     

    SECTION
      17.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
 AGREEMENT.

     

    All
      representations and warranties contained herein shall survive the execution
      and
      delivery of this Agreement and the related Units, the purchase or transfer
      by
      any Purchaser of any such Units or portion thereof or interest therein and
      may
      be relied upon by any subsequent holder of any such Units, regardless of any
      investigation made at any time by or on behalf of any Purchaser or any other
      holder of any such Units.  This Agreement, the Subsidiary Guarantee, the
      Notes, the Warrants, and the Registration Rights Agreement embody the entire
      agreement and understanding between the Purchasers and the Company and supersede
      all prior agreements and understandings relating to the subject matter
      hereof.

     

    SECTION
      18.  AMENDMENT AND WAIVER.

     

    18.1 Requirements.

    

    (a) This
      Agreement and the Notes may be amended, and the observance of any term hereof
      or
      of the Notes may be waived (either retroactively or prospectively), with (and
      only with) the written consent of the Company and the holders of Notes holding
      more than 50% in aggregate principal amount of the Notes at the time
      outstanding, except that (a) no amendment or waiver of any of the provisions
      of
      Section 1, 2, 3, 4, 5, or 6 hereof
      or
      the corresponding provision of any Supplement, or any defined term (as it is
      used in any such Section or such corresponding provision of any Supplement),
      will be effective as to any holder of Notes unless consented to by such holder
      of Notes in writing, and (b) no such amendment or waiver may, without the
      written consent of all of the holders of Notes at the time outstanding affected
      thereby, (i) subject to the provisions of Section 10 relating to acceleration
      or
      rescission, change the
      amount or time of any prepayment or payment of principal of, or reduce the
      rate
      or change the time of payment or method of computation of interest on the Notes,
      (ii) change the percentage of the principal amount of the Notes the holders
      of
      which are required to consent to any such amendment or waiver, or (iii) amend
      any of Sections 7, 10, 11.1, 14 or 16.

    
      
        
        

      

      
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      18.2 Solicitation
        of Holders of Notes.

      

      (a) Solicitation.
         The Company will provide each holder of the Notes (irrespective of the
        amount of Notes then owned by it) with sufficient information, sufficiently
        far
        in advance of the date a decision is required, to enable such holder to make
        an
        informed and considered decision with respect to any proposed amendment,
        waiver
        or consent in respect of any of the provisions hereof, or of the Notes.
 The Company will deliver executed or true and correct copies of each
        amendment, waiver or consent effected pursuant to the provisions of this
        Section
        18 to each holder of outstanding Notes promptly following the date on which
        it
        is executed and delivered by, or receives the consent or approval of, the
        requisite holders of Notes.

      

      (b) Payment.
         The Company will not directly or indirectly pay or cause to be paid any
        remuneration, whether by way of supplemental or additional interest, fee
        or
        otherwise, or grant any security, to any holder of Notes as consideration
        for or
        as an inducement to the entering into by any holder of Notes of any waiver
        or
        amendment of any of the terms and provisions hereof unless such remuneration
        is
        concurrently paid, or security is concurrently granted, on the same terms,
        ratably to each holder of Notes then outstanding even if such holder did
        not
        consent to such waiver or amendment.

      

      18.3 Binding
        Effect, Etc.  Any
        amendment or waiver consented to as provided in this Section 18 applies equally
        to all holders of Notes and is binding upon them and upon each future holder
        of
        any Note and upon the Company without regard to whether such Note has been
        marked to indicate such amendment or waiver.  No such amendment or waiver
        will extend to or affect any obligation, covenant, agreement, Default or
        Event
        of Default not expressly amended or waived or impair any right consequent
        thereon.  No course of dealing between the Company and the holder of any
        Note nor any delay in exercising any rights hereunder or under any Note shall
        operate as a waiver of any rights of any holder of such Note.  As used
        herein, the term “this Agreement” and references thereto shall mean this
        Agreement as it may from time to time be amended or supplemented.

      

      18.4 Notes
        Held by Company, Etc.  Solely
        for the purpose of determining whether the holders of the requisite percentage
        of the aggregate principal amount of Notes then outstanding approved or
        consented to any amendment, waiver or consent to be given under this Agreement
        or the Notes, or have directed the taking of any action provided herein or
        in
        the Notes to be taken upon the direction of the holders of a specified
        percentage of the aggregate principal amount of Notes then outstanding, Notes
        directly or indirectly owned by the Company or any of its Affiliates shall
        be
        deemed not to be outstanding.

       

      SECTION
        19. NOTICES.

       

      All
        notices and communications provided for hereunder shall be in writing and
        sent
        (a) by telefacsimile if the sender on the same day sends a confirming copy
        of
        such notice by a recognized overnight delivery service (charges prepaid),
        or (b)
        by registered or certified mail with return receipt requested (postage prepaid),
        or (c) by a recognized overnight delivery service (with charges prepaid).
         Any such notice must be sent:

    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (i) if
      to a
      Purchaser, to such Purchaser at the address specified for such communications
      in
Schedule
      A
      to this
      Agreement, or at such other address as such Purchaser shall have specified
      to
      the Company in writing pursuant to this Section 19, or

    

    (ii) if
      to the
      Company, to the Company at its address set forth at the beginning hereof to
      the
      attention of Chief Financial Officer, with a copy to the General Counsel, or
      at
      such other address as the Company shall have specified to the holder of each
      Note in writing.

     

    Notices
      under this Section 19 will be deemed given only when actually
      received.

     

    SECTION
      20.  CONFIDENTIAL INFORMATION.

     

    For
      the
      purposes of this Section 20, “Confidential Information” means information
      delivered to any Purchaser by or on behalf of the Company or any Subsidiary
      in
      connection with the transactions contemplated by or otherwise pursuant to this
      Agreement that is proprietary in nature and that was clearly marked or labeled
      or otherwise adequately identified when received by such Purchaser as being
      confidential information of the Company or such Subsidiary, provided that such
      term does not include information that (a) was publicly known or otherwise
      known
      to such Purchaser prior to the time of such disclosure, (b) subsequently becomes
      publicly known through no act or omission by such Purchaser or any Person acting
      on such Purchaser's behalf, or (c) otherwise becomes known to such Purchaser
      other than through disclosure by the Company or any Subsidiary.  Each
      Purchaser will maintain the confidentiality of such Confidential Information
      in
      accordance with procedures adopted by such Purchaser in good faith to protect
      confidential information of third parties delivered to such Purchaser, provided
      that such Purchaser may deliver or disclose Confidential Information to (w)(i)
      such Purchaser's directors, trustees, officers, employees, agents, attorneys
      and
      affiliates (to the extent such disclosure reasonably relates to the
      administration of the investment represented by such Purchaser's Notes), (ii)
      such Purchaser's financial advisors and other professional advisors who agree
      to
      hold confidential the Confidential Information substantially in accordance
      with
      the terms of this Section 20, or (iii) any other holder of any Note (x) to
      effect compliance with any law, Rule, regulation or order applicable to such
      Purchaser, (y) in response to any subpoena or other legal process, provided
      that, to the extent permitted by law, each holder will use reasonable efforts
      to
      notify the Company of any request to disclose Confidential Information requested
      pursuant to any subpoena or other legal process, provided further that the
      failure to notify the Company of any such request shall not result in any
      liability to such holder, or (z) if an Event of Default has occurred and is
      continuing, to the extent such Purchaser may reasonably determine such delivery
      and disclosure to be necessary or appropriate in the enforcement or for the
      protection of the rights and remedies under such Purchaser's Notes and this
      Agreement.  Each holder of a Note, by its acceptance of a Note, will be
      deemed to have agreed to be bound by and to be entitled to the benefits of
      this
      Section 20 as though it were a party to this Agreement.  On reasonable
      request by the Company in connection with the delivery to any holder of a Note
      of information required to be delivered to such holder under this Agreement
      or
      requested by such holder
      (other than a holder that is a party to this Agreement or its nominee), such
      holder will enter into an agreement with the Company embodying the provisions
      of
      this Section 20.

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    SECTION
      21.  MISCELLANEOUS.

     

    21.1 Successors
      and Assigns.
       All covenants and other agreements contained in this Agreement by or on
      behalf of any of the parties hereto bind and inure to the benefit of their
      respective successors and assigns (including, without limitation, any subsequent
      holder of a Note) whether so expressed or not.

    

    21.2 Payments
      Due on Non-Business Days.
       Anything in this Agreement or the Notes to the contrary notwithstanding,
      any payment of principal of or interest on any Note that is due on a date other
      than a Business Day shall be made on the next succeeding Business Day without
      including the additional days elapsed in the computation of the interest payable
      on such next succeeding Business Day.

    

    21.3 Severability.
       Any provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof, and any such prohibition or unenforceability in any
      jurisdiction shall (to the full extent permitted by law) not invalidate or
      render unenforceable such provision in any other jurisdiction.

    

    21.4 Construction.
       Each covenant contained herein shall be construed (absent express
      provision to the contrary) as being independent of each other covenant contained
      herein, so that compliance with any one covenant shall not (absent such an
      express contrary provision) be deemed to excuse compliance with any other
      covenant.  Where any provision herein refers to action to be taken by any
      Person, or which such Person is prohibited from taking, such provision shall
      be
      applicable whether such action is taken directly or indirectly by such
      Person.

    

    21.5 Counterparts.
       This Agreement may be executed in any number of counterparts, each of
      which shall be an original but all of which together shall constitute one
      instrument.  Each counterpart may consist of a number of copies hereof,
      each signed by less than all, but together signed by all, of the parties
      hereto.

    

    21.6 Governing
      Law.
       This Agreement shall be construed and enforced in accordance with, and the
      rights of the parties shall be governed by, the law of the State of Florida
      excluding choice-of-law principles of the law of such state that would require
      the application of the laws of a jurisdiction other than such
      state.

    

    21.7 Legal
      Rate of Interest.
       Regardless of any provision contained in this Agreement or in any
      Guaranty, the rate of interest borne by the Notes shall not exceed the maximum
      amount of nonusurious interest that may be contracted for, taken, reserved,
      charged or received under any applicable law; any interest in excess of that
      maximum amount shall be credited on the principal of the Notes or, if that
      has
      been paid, refunded.  On any acceleration or required or permitted
      prepayment, any such excess shall be canceled automatically as of the
      acceleration or prepayment or, if already paid, credited on the principal of
      the
      Notes or, if the principal of the Notes has been paid, refunded.  In
      determining whether or not the interest paid or payable, under any specific
      contingency, exceeds the maximum amount of nonusurious interest, the
      Company and holders of the Notes shall, to the maximum extent permitted under
      applicable law, (a) characterize any nonprincipal payment as an expense, fee
      or
      premium rather than as interest, (b) exclude voluntary prepayments and the
      effects thereof, and (c) spread the total amount of interest throughout the
      entire contemplated term of the Notes.

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

    21.8 Submission
      to Process.
       THE COMPANY AND THE PURCHASERS HEREBY AGREE THAT ANY LEGAL ACTION OR
      PROCEEDING AGAINST THE COMPANY WITH RESPECT TO THIS AGREEMENT, OR THE NOTES
      SHALL BE BROUGHT IN THE COURTS OF THE STATE OF FLORIDA OR (TO THE EXTENT THEY
      HAVE SUBJECT MATTER JURISDICTION) OF THE UNITED STATES OF AMERICA FOR THE
      SOUTHERN DISTRICT OF FLORIDA AS THE HOLDERS OF 51% IN PRINCIPAL AMOUNT OF THE
      NOTES MAY ELECT, AND, BY EXECUTION AND DELIVERY HEREOF, THE COMPANY ACCEPTS
      AND
      CONSENTS, FOR ITSELF AND IN RESPECT TO ITS PROPERTY, GENERALLY AND
      UNCONDITIONALLY, TO THE JURISDICTION OF THE AFORESAID COURTS AND AGREES THAT
      SUCH JURISDICTION SHALL BE EXCLUSIVE, UNLESS WAIVED BY THE COMPANY AND THE
      HOLDERS OF 51% IN PRINCIPAL AMOUNT OF THE NOTES IN WRITING.  THE COMPANY
      WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO STAY OR TO
      DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID COURTS ON THE BASIS OF
      FORUM NON CONVENIENS.

    

    21.9 Waivers.
       THE COMPANY WAIVES (A) THE RIGHT TO TRIAL BY JURY (WHICH EACH HOLDER OF
      NOTES HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF
      ANY
      KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY SECURITY DOCUMENT OR
      THE
      NOTES; (B) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST,
      DEFAULT, NON-PAYMENT, INTENT TO ACCELERATE, ACCELERATION, MATURITY, RELEASE,
      COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL DOCUMENTS,
      INSTRUMENTS, AND GUARANTIES AT ANY TIME HELD BY THE HOLDERS OF NOTES (OR ANY
      AGENT THEREFOR) ON WHICH THE COMPANY MAY IN ANY WAY BE LIABLE AND HEREBY
      RATIFIES AND CONFIRMS WHATEVER THE HOLDERS OF NOTES MAY DO IN THIS REGARD;
      AND
      (C) NOTICE OF ACCEPTANCE HEREOF.  THE COMPANY ACKNOWLEDGES THAT THE
      FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO THE HOLDERS' ENTERING INTO THIS
      AGREEMENT AND THAT THE HOLDERS ARE RELYING UPON THE FOREGOING WAIVERS IN THEIR
      FUTURE DEALINGS WITH THE COMPANY.  THE COMPANY WARRANTS AND REPRESENTS THAT
      IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY
      AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
      COUNSEL.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS
      WRITTEN CONSENT TO A TRIAL BY THE COURT.

    

    21.10 Exculpation. Each
      party to this Agreement acknowledges that Brown Raysman Millstein Felder &
Steiner LLP represented J. Giordano Securities, LLC in the transactions
      contemplated by this Agreement and has not represented either the Company or
      any
      Purchaser in connection with such transaction.

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    The
      execution hereof by the Purchasers shall constitute a contract among the Company
      and the Purchasers for the uses and purposes hereinabove set forth.
 

     

    
      	 	Very truly yours,
	 	 	 
	 	21st
              CENTURY HOLDING COMPANY
	 
 	 
 	 
 
	 	By  	 
	 	
              
Richard
              A. Widdicombe,
	 	Chief
              Executive Officer

    

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    

      Accepted
        as of the first date written above.

       

      PURCHASER:

    

     

     

    
      By
                                                        

       

      Name:                                           

       

      Title:  
                                                  

      
 

    

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    
       

      EXHIBIT
        A

       

    

    FORM
      OF NOTE

     

    A

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    21ST
      CENTURY HOLDING COMPANY

    

    6%
      SENIOR
      SUBORDINATED NOTE DUE ______________, 2006

    

    No.
       [______]

    [Date]

    $[__________]

    

    FOR
      VALUE
      RECEIVED, the undersigned, 21ST
      CENTURY
      HOLDING COMPANY (herein called the “Company”), a corporation organized and
      existing under the laws of the State of Florida , hereby promises to pay to
      [_____________________] or registered assigns, the principal sum of
      [______________] DOLLARS with interest (computed on the basis of a 360-day
      year
      of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 6%
      per
      annum from the date hereof, payable quarterly beginning on ________________,
      2003.

    

    This
      Note
      is one of a series of Senior Subordinated Notes (herein called the “Notes”)
      issued pursuant to the Unit Purchase Agreement, dated as of ________________,
      2003 (as from time to time amended, supplemented or modified, the “Unit Purchase
      Agreement”), between the Company and the respective Purchasers named therein and
      is entitled to the benefits thereof.  Each holder of this Note will be
      deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
      provisions set forth in Section 20 of the Unit Purchase Agreement and (ii)
      to
      have made the representations set forth in Section 6 of the Unit Purchase
      Agreement.

    

    Payments
      of principal of and interest on this Note are to be made, at the Company’s
      option, in lawful money of the United States of America or, in whole or in
      part,
      by the issuance to the holder hereof of Interest Shares, as defined in and
      in
      accordance with the Unit Purchase Agreement.

    

    This
      Note
      is a registered Note and, as provided in the Unit Purchase Agreement, upon
      surrender of this Note for registration of transfer, duly endorsed, or
      accompanied by a written instrument of transfer duly executed, by the registered
      holder hereof or such holder's attorney duly authorized in writing, a new Note
      for a like principal amount will be issued to, and registered in the name of,
      the transferee.  Prior to due presentment for registration of transfer, the
      Company may treat the person in whose name this Note is registered as the owner
      hereof for the purpose of receiving payment and for all other purposes, and
      the
      Company will not be affected by any notice to the contrary.

    

    The
      Company will make required prepayments of principal on the dates and in the
      amounts specified in the Unit Purchase Agreement.  This Note is also
      subject to optional prepayment, in whole or from time to time in part, at the
      times and on the terms specified in the Unit Purchase Agreement, but not
      otherwise.

    

    If
      an
      Event of Default, as defined in the Unit Purchase Agreement, occurs and is
      continuing, the principal of this Note may be declared or otherwise become
      due
      and payable in the manner, at the price and with the effect provided in the
      Unit
      Purchase Agreement.

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    Pursuant
      to the Subsidiary Guarantee dated as of _____________, 2003 (the “Subsidiary
      Guarantee”), certain subsidiaries of the Company have absolutely and
      unconditionally guaranteed payment in full of the principal of, and interest
      on
      this Note and the performance by the Company of all of its obligations contained
      in the Unit Purchase Agreement all as more fully set forth in said Subsidiary
      Guarantee.

    

    This
      Note
      shall be construed and enforced in accordance with, and the rights of the
      Company and the holder hereof shall be governed by, the law of the State of
      Florida, excluding the choice-of-law principles of such state that would require
      the application of the laws of a jurisdiction other than such
      state.

    

    21ST
      CENTURY HOLDING COMPANY

    

    

    By:    
      _____________________________

     

    Name:
      _____________________________

    

    Title: 
       _____________________________

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    

    FORM
      OF WARRANT

     

    B

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C

    

    FORM
      OF SUBSIDIARY GUARANTEE

    

    C

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A

    

    PURCHASERSEXHIBIT
      4.2

     

    AMENDMENT

    TO

    UNIT
      PURCHASE AGREEMENT

    AND

    REGISTRATION
      RIGHTS AGREEMENT

    

    

    THIS
      AMENDMENT TO UNIT PURCHASE AGREEMENT AND REGISTRATION RIGHTS AGREEMENT (the
      “Amendment”) is dated effective as of October 15, 2003 by and among
      21st
      Century
      Holding Company, a Florida corporation (the “Company”), J. Giordano Securities,
      LLC (the “Placement Agent”), and the holders of the Company’s 6% Senior
      Subordinated Notes due July 31, 2006 (the “Notes”) as set forth on Schedule
      A
      hereto
      (collectively, the “Investors”).

     

    RECITALS:

    

    A.
       The Company and the Investors entered into that certain Unit Purchase
      Agreement dated July 31, 2003 (the “Unit Purchase Agreement”) pursuant to which
      the Investors purchased the Notes and, in connection therewith, the Company,
      the
      Placement Agent and the Investors also entered into a Registration Rights
      Agreement of even date therewith (the “Registration Rights
      Agreement”).

    

    B.
       The parties now desire to modify and amend certain rights and obligations
      of the parties under the Unit Purchase Agreement and the Registration Rights
      Agreement.

    

    AGREEMENT:

    

    NOW,
      THEREFORE, in consideration of the terms and conditions hereof, and other good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties agree as follows:

    

    1.
       Capitalized
      Terms.
       Capitalized terms used but not defined in this Amendment shall have the
      meanings as set forth in the Unit Purchase Agreement and the Registration Rights
      Agreement, as applicable.

    

    2.
       Amendments
      to Unit Purchase Agreement.
       

    

     

    (a)
       Section 7.1 of the Unit Purchase Agreement is hereby amended and restated
      in its entirety as follows: 

     

    “7.1
      Required
      Payments.

     

    

    (a)
      Principal. The
      principal amount of the Notes shall be due and payable in equal quarterly
      installments commencing on October 31, 2003 with the last installment due on
      July 31, 2006 (the date due of each quarterly installment is referred to herein
      as a “Quarterly Payment Date” and the last Quarterly Payment Date on July 31,
      2006 is referred to as the “Maturity Date”).  Each principal payment shall
      be paid in United States dollars or, to the extent legally permitted, in shares
      of Common Stock (the “Principal Shares”), at the Company’s option; provided,
      however, that the Company shall make principal payments in Principal Shares
      only
      to the extent provided in Section 12 hereof.  If such principal payment is
      paid in Principal Shares, then the number of Principal Shares to be issued
      on
      account of the principal payment shall be equal to (i) the amount of the
      principal payment due divided by (ii) 95% of the weighted-average volume price
      for the Common Stock on Nasdaq as reported by Bloomberg Financial Markets
      (“Bloomberg”) for the 20 consecutive trading days prior to the Quarterly Payment
      Date (the “Calculation Price”).  In the event the Company elects to pay the
      principal amount due in Principal Shares, (a) it shall notify the Holder of
      its
      election no later than 15 days prior to the commencement of the 20 consecutive
      trading day period referenced above, (b) it shall issue the applicable Principal
      Shares on the Quarterly Payment Date, and (c) it shall file a registration
      statement covering resale of the applicable Principal Shares (the “Registration
      Statement”) no later than two Business Days following the Quarterly Payment
      Date.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

     

    (b)
       Compensatory
      Payment. If
      a principal payment is made in Principal Shares and the weighted-average volume
      price for the Common Stock on Nasdaq as reported by Bloomberg for the three
      Business Day period ending on (and including) the date of effectiveness (the
      “Effective Date”) of the applicable Registration Statement (the “Post-Issuance
      Average Price”) is less than the Calculation Price, then the Company shall pay
      to each holder of the Notes an amount equal to (i) the difference between the
      Calculation Price and the Post-Issuance Average Price, multiplied by (ii) the
      number of Principal Shares issued on the applicable Quarterly Payment Date.
       Such amount shall be paid to each holder of the Notes in cash not later
      than 10 Business Days following the Effective Date of the applicable
      Registration Statement.”

     

    (b)
       Section 9.1 of the Unit Purchase Agreement is hereby amended and restated
      in its entirety as follows:

     

    “9.1
       Required
      Payments.

     

    (a)
       Interest.
       The
      principal amount of the Notes outstanding shall bear interest at the rate of
      6%
      per annum beginning on the date of issuance.  Interest shall be payable
      quarterly beginning on October 31, 2003.  Each interest payment shall be
      paid in United States dollars or, to the extent legally permitted, in shares
      of
      Common Stock (the “Interest Shares”), at the Company’s option; provided,
      however, that the Company shall make interest payments in Interest Shares only
      to the extent provided in Section 12 hereof.  If such interest payment is
      paid in Interest Shares, then the number of Interest Shares to be issued on
      account of the interest payment shall be equal to (i) the amount of the interest
      payment due divided by (ii) the Calculation Price.  In the event the
      Company elects to pay the interest amount due in Interest Shares, (a) it shall
      notify the Holder of its election no later than 15 days prior to the
      commencement of the 20 consecutive trading day period referenced in Section
      7.1
      above, (b) it shall issue the applicable Interest Shares on the Quarterly
      Payment Date, and (c) it shall file the Registration Statement covering resale
      of the applicable Interest Shares no later than two Business Days following
      the
      Quarterly Payment Date.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

     

    (b)
       Compensatory
      Payment. If
      an interest payment is made in Interest Shares and the Post-Issuance Average
      Price of the applicable Interest Shares is less than the Calculation Price,
      then
      the Company shall pay to each holder of the Notes an amount equal to (i) the
      difference between the Calculation Price and the Post-Issuance Average Price,
      multiplied by (ii) the number of Interest Shares issued on the applicable
      Quarterly Payment Date.  Such amount shall be paid to each holder of the
      Notes in cash not later than 10 Business Days following the Effective Date
      of
      the applicable Registration Statement.”

     

    3.
       Amendments
      to Registration Rights Agreement.

     

    (a)
       Section 4(a) of the Registration Rights Agreement shall be amended and
      restated in its entirety as follows:

    

    “(a)
      The
      parties acknowledge that as of the date of this Amendment, the Company has
      filed
      a Registration Statement on Form S-3 covering the resale of the Warrants and
      the
      Warrant Shares and a Registration Statement on Form S-1 relating to the
      Principal Shares and Interest Shares.  The parties agree that on or before
      the date specified in clause (c) of Sections 7.1 and 9.1 of the Unit Purchase
      Agreement, as amended, the Company will file an amendment to its Registration
      Statement on Form S-1 to cover the resale of the Principal Shares and Interest
      Shares to be issued by the Company in payment of the October 31, 2003 quarterly
      payment due on the Notes, and that thereafter, the Company shall file in
      subsequent quarters such additional registration statements (individually,
      a
“Registration Statement,” and collectively, the “Registration Statements”) as
      provided in Sections 7.1 and 9.1 of the Unit Purchase Agreement.  No later
      than five Trading Days prior to the anticipated effective date of each such
      Registration Statement, the Company shall provide copies of same to the Holders
      or their counsel, and shall provide the Holders with copies of any comment
      letters received from the Commission with respect thereto within five Trading
      Days of receipt thereof.

     

    “The
      Company shall use diligent best efforts to cause each Registration Statement
      to
      become effective within 60 days from the date of filing thereof.  Each such
      Registration Statement shall include all of the Registrable Securities then
      issued and not covered by a previously filed Registration Statement, to the
      extent permitted by the rules and interpretations of the Commission as then
      in
      effect, and shall include appropriate language regarding reliance upon Rule
      416
      to the extent permitted by the Commission.  The Company will notify the
      Holders and its transfer agent of the effectiveness of a Registration Statement
      within five Trading Days of such event.” 

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (b)
       Section 4(c) of the Registration Rights Agreement shall be amended by
      deleting the third sentence thereof.

    

    4.
       Governing
      Law.
       This Amendment shall be interpreted in accordance with the laws of the
      State of Florida.

    

    5.
       Effect
      of Amendment.
       Except as expressly set forth herein, the Unit Purchase Agreement and
      Registration Rights Agreement shall remain unmodified and in full force and
      effect pursuant to their respective terms and conditions.

    

    6.
       Counterparts.
       This Amendment may be executed in two or more counterparts, each of which
      shall be deemed an original, but all of which together shall constitute one
      and
      the same instrument.

    

     

    [SIGNATURES
      ON FOLLOWING PAGE]

     

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

     

    The
      parties have caused this Amendment to be executed and delivered on behalf of
      each such party, effective as of the date set forth above.

     

    

    
      	 	 	 
	 	 COMPANY:
	 	 
	 	
              21st
                CENTURY HOLDING COMPANY,

              a Florida corporation

            
	 
 	 
 	 
 
	 	By:  	 //s//
              Edward
              J. Lawson
	 	
              
Name:
              Edward J. Lawson
	 	Title:  Chairman

    

    

     

    
      	 	 	 
	 	 PLACEMENT AGENT:
	 	 
	 	
              J.
                GIORDANO SECURITIES, LLC,

              a _____________ limited liability company*

            
	 
 	 
 	 
 
	 	By:  	//s//
              James Giordano
	 	
              
Name:James
              Giordano
	 	Title: President

    

     

    
      	 	 	 
	 	 
	 	 *Only as to Registration Rights
              Agreement 
	 	 INVESTOR:
	 
 	 
 	 
 
	 	 	 Pandora Select Partners, LP
	 	 	 (Printed Name of Investor)
	 	 	 
	 	By:  	//s//
              Andrew Redleaf
	 	
              
Name:Andrew
              Redleaf
	 	Title: Managing
              Member

    

     

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	 	 	 
	 	INVESTOR:
	 
 	 
 	 
 Whitebox
              Hedged High Yield Partners, LP
	 	 	 (Printed Name of Investor)
	 	 	 
	 	By:  	//s//
              Andrew Redleaf
	 	
              
Name: Andrew
              Redleaf
	 	Title:Managing
              Member

    

     

    
      	 	 	 
	 	INVESTOR:
	 
 	 
 	 
 Whitebox
              Convertible
              Arbitrage Partners, LP
	 	 	 (Printed Name of Investor)
	 	 	 
	 	By:  	//s//
              Andrew Redleaf
	 	
              
Name: Andrew
              Redleaf
	 	Title:Managing
              Member

    

      	
            	 	 
	 	INVESTOR:
	 
 	 
 	 
 SilverCreek
              Limited Partnership
	 	 	 (Printed Name of Investor)
	 	 	 
	 	By:  	//s//
              Bryn Joynt
	 	
              
Name: Bryn
              Joynt
	 	Title:VP
              of Manager

    

     

    
      

        	
              	 	 
	 	INVESTOR:
	 
 	 
 	 
 Newport
                Alternative Income Fund
	 	 	 (Printed Name of Investor)
	 	 	 
	 	By:  	//s//
                Bryn Joynt
	 	
                
Name: Bryn
                Joynt
	 	Title:VP
                of Manager

      

       

    

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	
            	 	 
	 	INVESTOR:
	 
 	 
 	 
 SilverCreek
              II Limited
	 	 	 (Printed Name of Investor)
	 	 	 
	 	By:  	//s//
              Bryn Joynt
	 	
              
Name: Bryn
              Joynt
	 	Title:VP
              of Manager

     

    
      	
            	 	 
	 	INVESTOR:
	 
 	 
 	 
 Coastal
              Convertibles LTD
	 	 	 (Printed Name of Investor)
	 	 	 
	 	By:  	 //s//
              J. Lurie
	 	
              
Name: J.
              Lurie
	 	Title:Director
              / Member

    

     

    
      
        
          	
                	 	 
	 	INVESTOR:
	 
 	 
 	 
 Coastal
                  Convertibles LTD
	 	 	 (Printed Name of Investor)
	 	 	 
	 	By:  	 //s//
                  Richard Cayne
	 	
                  
Name: Richard
                  Cayne
	 	Title:Director
                  / Member

        

      

       

      
        	
              	 	 
	 	INVESTOR:
	 
 	 
 	 
 OTAPE
                Investments LLC
	 	 	 (Printed Name of Investor)
	 	 	 
	 	By:  	 //s//
                Richard Cayne
	 	
                
Name: Richard
                Cayne
	 	Title:General
                Counsel

         

      

    

    
      
        	
              	 	 
	 	INVESTOR:
	 
 	 
 	 
 Omicron
                Master Trust
	 	 	 (Printed Name of Investor)
	 	 	 
	 	By:  	 //s//
                Bruce Bernstein
	 	
                
Name: Bruce
                Bernstein
	 	Title:Managing
                Member

         

      

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    Schedule
      A

    

    
      	
              Manager

            	
              Purchaser

              (LEGAL
                NAME TO BE PUT NOTE)

            	
              Number of Units

            
	
               

            	 	
               

            
	
              Whitebox Advisors

            	
               

              Pandora Select Partners, LP

              Whitebox Hedged High Yield Partners, LP

              Whitebox Convertible Arbitrage Partners, LP

            	
               

              1,000

              2,000

              2,000

            
	
              SilverCreek

            	
               

              SilverCreek Limited Partnership

              Newport Alternative Income Fund

              SilverCreek II Limited

            	
               

              620

              100

              280

            
	
              Tradewinds

            	
               

              Coastal Convertibles LTD

            	
               

              750

            
	
              OTA

            	
               

              OTAPE Investments LLC

            	
               

              250

            
	
              Omicron

            	
               

              Omicron Master Trust

            	
               

              500

            

    

    

    
      
        
        

      

      
        A-1

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