Document:

Exhibit
10.13

 

DOCUMENT NO.
24

 

Complete date of
resolution and date of execution.  Sign
and date.

 

1

 

SECURED LOAN
NOTE

 

OCEAN
RESOURCES, INC.

 

(Company
No.3030709) (‘the Company’)

 

(Incorporated
in Delaware, U.S.A)

 

Created
pursuant to the constitution of the Company, and a resolution of its officers
dated                         2003

 

	
  Dated

  	
   

  	
  2003 (‘The
  Execution Date’)

  

 

Principal Sum:
USD 950,000

 

Noteholder:
Argent Capital, LLC of PO Box 590, Charlestown, Nevis, Leeward Islands.

 

1.                                      Definitions and Interpretation

 

1.1                                 In this Loan Note:

 

1.1.1                                             ‘Noteholder’ means the
registered holder or holders for the time being of this Loan Note and includes
the successors in title of the registered holders;

 

1.1.2                                             ‘Principal Sum’ means
the principal sum of this Loan Note stated above;

 

1.1.3                                             ‘Subsidiary’ means a
subsidiary of the Company or of that subsidiary and references to ‘Subsidiaries’ shall be construed as
references to the subsidiaries for the time being of the Company.

 

1.2                                 In this Loan Note:

 

1.2.1                                             words denoting the singular shall include the plural and vice versa;

 

1.2.2                                             words denoting any gender include all genders and words denoting
persons shall include firms and corporations and vice versa.

 

1.3                                 References to ‘clauses’ are to clauses of this Loan Note;

 

1.4                                 Clause and paragraph headings are for convenience only and shall not
affect the interpretation of this Loan Note.

 

2.                                      Covenant to pay Principal Sum

 

FOR VALUE
RECEIVED the Company will pay the Principal Sum to the Noteholder by
instalments of USD 100,000 for every USD 500,000 of private investment funds
raised by the Company to be paid within 10 business days of collecting good
funds or on such earlier date as the Principal Sum shall become payable in accordance
with this Loan Note but in any event not later than the date 18 months after
the Execution Date (the date when final payment is due being ‘the Maturity
Date’).

 

2

 

3.                                      Interest

 

The
Company will pay interest to the Noteholder on the outstanding amount of the
Principal Sum from time to time at the rate of 7% per year on the Maturity
Date.  Should the Principal Sum (or any
part thereof) or any accrued interest not be paid on the Maturity Date then
such sums shall continue to bear interest at the rate of 7% per year on a daily
basis payable on demand.

 

4.                                      Withholding

 

Any
payment of interest to be made hereunder will be made after any withholding or
deduction for or on account of any tax or duty imposed or levied by any
authority having power to tax such payment which the Company shall for the time
being be required by any applicable law to withhold or deduct and the Company
shall not be obliged to pay any additional amount to the Noteholders in respect
of the tax or duty so withheld or deducted.

 

5.                                      Security

 

To
secure payment of the Principal Sum and all interest and other amounts payable
under this Loan Note the Company grants to the Noteholder the security set out
in the Schedule hereto.

 

6.                                      Payment
upon Notice

 

6.1                                 The Company may at any time give not less than 14 days’ notice in
writing to the Noteholder of its intention to prepay the Principal Sum in whole
or in part.

 

6.2                                 Upon the expiry of any notice given under clause 6.1 above the
Noteholder shall deliver this Loan Note to the Company at its principal office
and against such delivery the Company shall pay to the Noteholder the Principal
Sum or the part to be prepaid together with accumulated interest on that
amount.  In the case of a partial prepayment,
the Company shall issue to the Noteholder a replacement Loan Note for the
balance of the Principal Sum.  If the
Noteholder shall fail to deliver this Loan Note on the due date, interest shall
cease to run on the amount to be prepaid, and the Company shall pay that amount
into a separate account to be held on trust to pay that amount to the
Noteholder upon receipt by the Company of this Loan Note, and to pay any
interest earned on such account to the Company.

 

7.                                      Warranties

 

The
Company represents and warrants to the Noteholder that:

 

(i)                                     Organisation and Powers.  The Company is a corporation duly organised,
validly existing and in good standing under the laws of the jurisdiction if its
incorporation, and has all requisite power and authority to own its assets and
carry on its business and to execute, deliver and perform its obligations under
this Loan Note.  The Company is
qualified to do business and is in good standing in each jurisdiction in which
the failure so to qualify or be in good standing could reasonably be expected
to have a material adverse effect on the business, operations or financial
condition of the Company and its Subsidiaries taken as a whole.

 

(ii)                                  Authorisation; No Conflict.  The execution, delivery and performance by
the Company of this Loan Note have been duly authorised by all necessary
corporate actions of the Company and do not and will not (A) contravene the
terms of the constitution or certificate of incorporation, or bylaws, of the
Company; or (B) result in a breach of or constitute a default under any
material lease, instrument, contract or other agreement to which the Company is
a party or by which it or its properties may be bound or affected;

 

3

 

or (C) violate
any provision of any law, rule, regulation, order, judgment, decree or the like
binding on or affecting the Company.

 

(iii)                               Binding Obligations.  This Loan Note constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in accordance
with its terms.

 

(iv)                              Consents.  No authorisation, consent, approval, licence, exemption of, or
filing or registration with, any governmental authority or agency, or approval
or consent of any other person or entity, is required for the due execution,
delivery or performance by the Company of this Loan Note.

 

8.                                      Acceleration

 

The Principal
Sum shall immediately become payable together with all unpaid interest on it to
the date of payment on the happening of any one or more of the following
events:

 

8.1                                 if an effective resolution or court order is passed for the
liquidation of the Company;

 

8.2                                 if any seizure or execution is levied or enforced upon or against
any of the assets of the Company and is not paid out or discharged within 7
days;

 

8.3                                 if a creditor lawfully takes possession or a receiver is appointed
of the assets of the Company;

 

8.4                                 if the Company goes into insolvency or liquidation or ceases or
threatens to cease to carry on its business;

 

8.5                                 if default shall be made by the Company in the performance of any
covenant condition or obligation (other than the covenant for payment of
interest) binding on the Company under this Loan Note, which default is not
cured by the Company within 21 days following notice of such default;

 

8.6                                 if any representation or warranty given by the Company in this Loan
Note shall prove to have been incorrect in any material respect when made.

 

9.                                      Application
of Payments

 

Payments made
hereunder shall first be applied to payments of interest and then towards the
reduction of the Principal Sum.

 

10.                               Company
to Insure

 

The Company
agrees with the Noteholder that it will at all times until the Principal Sum
and all interest and other money from time to time payable under this Loan Note
shall have been paid or satisfied keep insured in accordance with sound
commercial practice and in insurance offices or institutions of good repute
such parts of the assets and activities of the Company and of its Subsidiaries
as are normally insured in businesses of a similar nature and shall produce
evidence of such insurance to the Noteholder for inspection upon demand.

 

11.                               Register

 

The
Company will keep a register and enter in it the issue and all transfers and
changes of ownership of this Loan Note. 
The register may be closed from time to time for such periods (not
exceeding 30 days in all in any year) as the Company may determine.

 

4

 

12.                               Transfer

 

12.1                           A transfer of this Loan Note shall be in writing under the hand of
the transferor.

 

12.2                           The transfer shall be lodged with the Company together with such
evidence of the title of the transferor (including production of this Loan
Note) as the Company may reasonably require and after that the transferee shall
be registered as the holder of this Loan Note.

 

12.3                           The Company shall be entitled to retain the transfer.

 

13.                               Registration
on transmission

 

Any person
entitled to this Loan Note by reason of the death of the Noteholder or
otherwise by operation of law may, upon producing such evidence of his title as
the Company may reasonably require, be registered as the holder of this Loan
Note and be subject to the same conditions of this Loan Note as a transferee.

 

14.                               Notice
of Trusts

 

The
Company shall recognise and treat the Noteholder as the sole absolute owner of
this Loan Note and as alone entitled to receive and give effectual discharges
for the money secured by this Loan Note. 
The Company shall not be affected by notice of any trust or any right,
title or claim of any person other than the Noteholder to this Loan Note.

 

15.                               Freedom
from Equities

 

The Principal
Sum and interest due on this Loan Note shall be payable, and this Loan Note
shall be transferable, without regard to any set off, cross claims or equities
between the Company and the Noteholder or any prior holder.

 

16.                               Method
of Payment

 

The
Principal Sum and interest due on this Loan Note will be paid at the principal
office of the Company.  Payment of such
money may be made by cheque posted at the risk of the Noteholder in a prepaid letter
to the Noteholder if he is a sole holder or to the first-named of joint holders
at his registered address or to such other person or address as the Noteholder
or joint holders may request in writing. 
Payment of any such cheque shall for all purposes be deemed to be
payment and satisfaction of the Principal Sum or interest represented by such
payment.

 

17.                               Presentment
etc

 

Save as
provided herein the Company and the Noteholder waive presentment, demand for
payment and notice of dishonour in connection with the delivery, acceptance,
performance default or endorsement of this Loan Note.

 

18.                               Loss or
Destruction

 

If this
Loan Note shall be lost or destroyed or damaged, the Company will at the
request of the Noteholder issue a duplicate, provided that the Noteholder shall
first have given to the Company such evidence of the circumstances and such
indemnities and security as it may require, and have paid the Company’s costs
(including legal costs) in connection therewith and such fee not exceeding USD
500 as the Company may require, and (in the case of damage) delivered the
damaged Loan Note to the Company.

 

5

 

19.                               Law

 

This Loan Note
and any dispute or claim arising out of or in connection with it shall be governed
by and construed in accordance with the laws of the State of Texas, U.S.A.

 

20.                               No
Waiver

 

No delay or
failure on the part of the Noteholder to exercise any power or right given
hereunder shall operate as a waiver thereof, and no right or remedy of the
Noteholder shall be deemed abridged or modified thereby.

 

21.                               Jurisdiction

 

All disputes
and claims arising out of or relating to this Loan Note shall be subject to the
non-exclusive jurisdiction of the Texas courts to which the Company and the
Noteholder irrevocably submit and in any legal proceedings by the Noteholder to
enforce payment of the Principal Sum (or part thereof) and/or interest it shall
in addition be entitled to claim the costs and expenses of such proceedings.

 

22.                               Notices

 

Any notice to
be given under this Loan Note by the Company shall be sufficiently given if
sent by first class post to the Noteholder at its address in the register kept
under clause 11 (or in the case of joint Noteholders, to the address of the
first-named in that register), and shall be deemed received on the working day
after posting.

 

SCHEDULE

 

Charge
over a Loan Note for USD1,000,000 issued by Marine Group International, Inc.

 

EXECUTED by
OCEAN RESOURCES, INC. the 31st day of December 2003:

 

 

	
   

  	
  /s/
  Dennis McLaughlin

  	
   

  

 

6Exhibit 10.1

                         SECURITIES PURCHASE AGREEMENT

         This Securities Purchase Agreement (this "AGREEMENT") is dated as of
February 9, 2004, among Hollywood Media Corp., a Florida corporation (the
"COMPANY"), and the investors identified on the signature pages hereto (each, an
"INVESTOR" and collectively, the "INVESTORS").

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

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

                                   ARTICLE I.
                                   DEFINITIONS

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

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

                  "AFFILIATE" means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with a Person, as such terms are used in and construed under Rule
144. With respect to an Investor, any investment fund or managed account that is
managed on a discretionary basis by the same investment manager as such Investor
will be deemed to be an Affiliate of such Investor.

                  "BUSINESS DAY" means any day except Saturday, Sunday and any
day which shall be a federal legal holiday or a day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

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

                  "CLOSING DATE" means the date of the Closing.

                  "COMMISSION" means the Securities and Exchange Commission.

                  "COMMON STOCK" means the common stock of the Company, $.01 par
value per share, and any securities into which such common stock may hereafter
be reclassified.

<PAGE>

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

                  "COMPANY COUNSEL" means Broad and Cassel.

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

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

                  "INVESTMENT AMOUNT" means, with respect to each Investor, the
investment amount indicated below such Investor's name on the signature page of
this Agreement.

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

                  "PER UNIT PURCHASE PRICE" equals $2.84, comprised of $2.80 for
each Share and $.04 for 25% Warrant coverage.

                  "PERSON" means an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or subdivision
thereof) or other entity of any kind.

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

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

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

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

                  "SECURITIES" means the Shares and the Warrants.

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

                                       2
<PAGE>

                  "SHARES" means the shares of Common Stock issued or issuable
to the Investors pursuant to this Agreement and the Warrant Shares issuable to
the Investors upon exercise of the Warrants.

                  "SUBSIDIARY" means any subsidiary of the Company that is
required to be listed in Schedule 3.1(a).

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

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

                  "TRANSACTION DOCUMENTS" means this Agreement, the Registration
Rights Agreement, the Warrants and any other documents or agreements executed in
connection with the transactions contemplated hereunder.

                  "WARRANT" means the Callable Common Stock Purchase Warrant in
the form attached hereto as Exhibit "B," which is issuable to the Investors at
the Closing.

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

                                  ARTICLE II.
                                PURCHASE AND SALE

         2.1 Closing. Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to each Investor, and
each Investor shall, severally and not jointly, purchase from the Company, the
Closing Shares (as defined below) and Warrants, at the Per Unit Purchase Price,
representing such Investor's Investment Amount. The Closing shall take place at
the offices of Kirkpatrick & Lockhart, 10100 Santa Monica Boulevard, 7th Floor,
Los Angeles, CA 90067 on the date this Agreement is executed and delivered by
the parties or at such other location or time as the parties may agree.

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

                  (i) a certificate evidencing a number of Shares (the "CLOSING
SHARES") equal to such Investor's Investment Amount divided by the Per Unit
Purchase Price, registered in the name of such Investor;

                                       3
<PAGE>

                  (ii) a Warrant, registered in the name of such Investor,
pursuant to which such Investor shall have the right to acquire the number of
shares of Common Stock equal to 25% of the number of Closing Shares acquired by
the Investor pursuant to this Agreement.

                  (iii) the legal opinion of Company Counsel, in agreed form,
addressed to the Investors; and

                  (iv) the Registration Rights Agreement, duly executed by the
Company.

                  (v) a statement by the Company of compliance with all
applicable rules of the NASDAQ Stock Market, including rules 4350 ("SHAREHOLDER
APPROVAL"), 4310(c)(17) ("NOTIFICATION") and 4510(b) ("ADDITIONAL SHARES"), as
set forth in the NASD Manual.

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

                  (i) its Investment Amount, in United States dollars and in
immediately available funds, by wire transfer to an account designated in
writing by the Company for such purpose; and

                  (ii) the Registration Rights Agreement, duly executed by such
Investor.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

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

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

                  (b) Organization and Qualification. Each of the Company and
each Subsidiary is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Neither the Company nor any Subsidiary is in violation
of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the
Company and each Subsidiary is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which
the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good

                                       4
<PAGE>

standing, as the case may be, could not, individually or in the aggregate, have
or reasonably be expected to result in (i) an adverse effect on the legality,
validity or enforceability of any Transaction Document, (ii) a material and
adverse effect on the results of operations, assets, prospects, business or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as
a whole, or (iii) a material impairment to the Company's ability to perform on a
timely basis its obligations under any Transaction Document (any of (i), (ii) or
(iii), a "MATERIAL ADVERSE EFFECT") and no Proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit
or curtail such power and authority or qualification.

                  (c) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company in
connection therewith. Each Transaction Document has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with
the terms hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.

                  (d) No Conflicts. The execution, delivery and performance of
the Transaction Documents by the Company, the issuance and sale of the
Securities (including the issuance of the Warrant Shares upon exercise of the
Warrants) and the consummation by the Company of the other transactions
contemplated thereby do not and will not (i) conflict with or violate any
provision of the Company's or any Subsidiary's certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) conflict with or result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company or a Subsidiary is
subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company or a Subsidiary is bound or affected
or (iv) conflict with or violate the terms of any agreement by which the Company
or any Subsidiary is bound or to which any property or asset of the Company or
any Subsidiary is bound or affected; except in the case of each of clauses (ii),
(iii) and (iv), such as could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect.

                  (e) Filings, Consents and Approvals. Except as disclosed in
Schedule 3.1(e), the Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
(i) the filing with the Commission of one or more Registration Statements in

                                       5
<PAGE>

accordance with the requirements Registration Rights Agreement, (ii) filings
required by state securities laws, which the Company will promptly, and in any
event prior to the Effectiveness Date under the Registration Statement, make (at
the sole expense of the Company) in order to permit the holders of the
Securities to resell Shares to Persons in each State in the U.S.A., (iii) the
filings required in accordance with Section 4.5, and (iv) those that have been
made or obtained prior to the date of this Agreement.

                  (f) Issuance of the Securities. The Securities have been duly
authorized and, when issued and paid for in accordance with the Transaction
Documents, will be duly and validly issued, and the Shares will be fully paid
and nonassessable, free and clear of all Liens. The issuance of the Securities
(including the issuance of the Warrant Shares upon exercise of the Warrants) is
not subject to any preemptive or similar rights to subscribe for or purchase
securities. The Company has reserved from its duly authorized capital stock all
of the Shares issuable pursuant to this Agreement and upon exercise of the
Warrants.

                  (g) Capitalization. The number of shares and type of all
authorized, issued and outstanding capital stock of the Company, and all shares
of Common Stock reserved for issuance under the Company's various option and
incentive plans, is set forth in Schedule 3.1(g). Except as set forth in
Schedule 3.1(g), no securities of the Company are entitled to preemptive or
similar rights, and no Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as a result of the purchase
and sale of the Securities and except as disclosed in the SEC Reports or
Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to issue additional shares of
Common Stock, or securities or rights convertible or exchangeable into shares of
Common Stock. Except as set forth in Schedule 3.1(g), the issue and sale of the
Securities will not, immediately or with the passage of time, obligate the
Company to issue shares of Common Stock or other securities to any Person (other
than the Investors) and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or reset price under
such securities. All of the outstanding shares of capital stock of the Company
are validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe
for or purchase securities. No further approval or authorization of any
stockholder, the Board of Directors of the Company or others is required for the
issuance and sale of the Securities. Except as disclosed in the Disclosure
Materials, there are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company's capital stock to which the
Company is a party or, to the knowledge of the Company, between or among any of
the Company's stockholders, except as would not have a Material Adverse Effect.

                  (h) SEC Reports; Financial Statements. The Company has filed
all reports and proxy statements required to be filed by it under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the twenty-four months preceding the date hereof (or such shorter period as
the Company was required by law to file such reports) (the foregoing materials

                                       6
<PAGE>

being collectively referred to herein as the "SEC REPORTS" and, together with
the Schedules to this Agreement (if any), the "DISCLOSURE MATERIALS") on a
timely basis or has timely filed a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such extension. As
of their respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act and the rules
and regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing and such financial statements have
been prepared in accordance with accounting principles generally accepted in the
U.S. ("GAAP") applied on a consistent basis during the periods involved (except
as may be otherwise specified in such financial statements or the notes thereto,
or in the case of unaudited financial statements, to the extent they may exclude
footnotes or may be condensed or summary footnotes or statements), and fairly
present in all material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments. The Company
maintains and will continue to maintain a standard system of accounting
established and administered in accordance with GAAP and the applicable
requirements of the Exchange Act.

                  (i) Press Releases. The press releases disseminated by the
Company during the two (2) years preceding the date of this Agreement taken as a
whole do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

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

                                       7
<PAGE>

                  (k) Litigation. Except as disclosed in Schedule 3.1(k), there
is no Action which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
except as set forth in the SEC Reports, could, if there were an unfavorable
decision, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect. Except as set forth in the SEC Reports,
neither the Company nor any Subsidiary, nor any director or officer thereof, is
or has been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been, and to the knowledge of the Company, there
is not pending or contemplated, any investigation by the Commission involving
the Company or any current or former director or officer of the Company. The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act.

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

                  (m) Compliance. Neither the Company nor any Subsidiary (i) is
in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body, or (iii)
is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except
as to each of (i), (ii) and (iii) above, as could not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect. The Company is in compliance with the applicable requirements of the
Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations
thereunder, as currently required to be complied with as of the date hereof,
except where such noncompliance, individually or in the aggregate, could not
have or reasonably be expected to result in a Material Adverse Effect.

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

                  (o) Title to Assets. Except as disclosed in the Disclosure
Materials or Schedule 3.1(o), the Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them that is
material to their respective businesses and good and marketable title in all
personal property owned by them that is material to their respective businesses,
in each case free and clear of all Liens, except for Liens as do not materially

                                       8
<PAGE>

affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and the
Subsidiaries. Any real property and facilities held under lease by the Company
and the Subsidiaries are held by them under valid, subsisting and enforceable
leases of which the Company and the Subsidiaries are in compliance, except as
could not, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect.

                  (p) Patents and Trademarks. The Company and the Subsidiaries
have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights, licenses and
other similar rights that are necessary or material for use in connection with
their respective businesses as described in the SEC Reports and which the
failure to so have could, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect (collectively, the
"INTELLECTUAL PROPERTY RIGHTS"). Neither the Company nor any Subsidiary has
received a written notice that the Intellectual Property Rights used by the
Company or any Subsidiary violates or infringes upon the rights of any Person
other than matters previously resolved or as would not, individually or in the
aggregate, have a Material Adverse Effect. Except as set forth in the SEC
Reports, all such Intellectual Property Rights are enforceable and do not
violate or infringe the Intellectual Property Rights of others in any respect
that would reasonably be expected to result in a Material Adverse Effect and, to
the knowledge of the Company, there is no material existing infringement by
another Person of any of the Intellectual Property Rights.

                  (q) Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are believed by the Company to be prudent in the
businesses in which the Company and the Subsidiaries are engaged. The Company
has no reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
without a significant increase in cost, other than general insurance price
increases.

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

                  (s) Internal Accounting Controls. The Company and the
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with

                                       9
<PAGE>

respect to any differences. The Company has established disclosure controls and
procedures (as defined in Exchange Act rules 13a-14 and 15d-14) for the Company
and designed such disclosure controls and procedures to ensure that material
information relating to the Company, including its Subsidiaries, is made known
to the certifying officers by others within those entities, particularly during
the period in which the Company's Form 10-K or 10-Q, as the case may be, is
being prepared. The Company's certifying officers have evaluated the
effectiveness of the Company's controls and procedures as of the end of the
Company's most recently ended fiscal quarter (such date, the "EVALUATION DATE").
The Company presented in its most recently filed Form 10-K or Form 10-Q the
conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the Evaluation Date.
Since the Evaluation Date, there have been no significant changes in the
Company's internal controls (as such term is defined in Item 307(b) of
Regulation S-K under the Exchange Act) or, to the Company's knowledge, in other
factors that could significantly affect the Company's internal controls.

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

                  (u) Certain Fees. Except as described in Schedule 3.1(u), no
brokerage or finder's fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. The Investors shall have no obligation with
respect to any fees or with respect to any claims (other than such fees or
commissions owed by an Investor pursuant to written agreements executed by such
Investor which fees or commissions shall be the sole responsibility of such
Investor) made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by this Agreement.

                  (v) Certain Registration Matters. Assuming the accuracy of the
Investors' representations and warranties set forth in Section 3.2(b)-(e), no
registration under the Securities Act is required for the offer and sale of the
Securities by the Company to the Investors under the Transaction Documents.
Neither the Company nor any person acting on behalf of the Company has offered
or sold any of the Securities by any form of general solicitation or general
advertising. The Company has offered the Securities for sale only to the

                                       10
<PAGE>

Investors and certain other "accredited investors" within the meaning of Rule
501 under the Securities Act. Except as described in Schedule 3.1(v), the
Company has not granted or agreed to grant to any Person any rights (including
"piggy-back" registration rights) to have any securities of the Company
registered with the Commission or any other governmental authority that have not
been satisfied.

                  (w) Listing and Maintenance Requirements. The Company's Common
Stock is registered pursuant to Section 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration. Except as specified in the SEC
Reports or Schedule 3.1 (w), the Company has not, in the two years preceding the
date hereof, received notice from any Trading Market to the effect that the
Company is not in compliance with the listing or maintenance requirements
thereof. The Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with the listing and
maintenance requirements for continued listing of the Common Stock on the
Trading Market, including the Eligibility Rules thereunder. The issuance and
sale of the Securities under the Transaction Documents does not contravene the
rules and regulations of the Trading Market on which the Common Stock is
currently listed or quoted, and no approval of the shareholders of the Company
thereunder is required for the Company to issue and deliver to the Investors the
Securities contemplated by Transaction Documents.

                  (x) Investment Company. The Company is not, and is not an
Affiliate of, and immediately after receipt of payment for the Securities will
not be, an "investment company" within the meaning of the Investment Company Act
of 1940, as amended.

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

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

                  (aa) Disclosure. The Company confirms that neither it nor any
Person acting on its behalf has provided any of the Investors or their agents or
counsel with any information that the Company believes constitutes material,
non-public information. The Company understands and confirms that the Investors
will rely on the foregoing representations and covenants in effecting
transactions in securities of the Company. All Disclosure Materials provided to
the Investors regarding the Company, its business and the transactions
contemplated hereby, furnished by or on behalf of the Company (including the
Company's representations and warranties set forth in this Agreement), when
taken as a whole, are true and correct and do not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they were
made, not misleading.

                                       11
<PAGE>

                  (bb) No Integrated Offering. Neither the Company, nor any of
its Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
the Securities Act or any applicable shareholder approval provisions, including,
without limitation, under the rules and regulations of the Trading Market on
which the Common Stock is currently listed or quoted.

                  (cc) Form S-3 Eligibility. The Company is eligible to register
the resale of the Shares by the Investors under Form S-3 promulgated under the
Securities Act and the Company hereby covenants and agrees to use its best
efforts to maintain its eligibility to use Form S-3 until the Registration
Statement covering the resale of the Shares shall have been filed with, and
declared effective by, the Commission.

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

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

                  (a) Organization; Authority. Such Investor is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the applicable Transaction Documents and otherwise to carry out
its obligations thereunder. The execution, delivery and performance by such
Investor of the transactions contemplated by this Agreement has been duly
authorized by all necessary corporate or, if such Investor is not a corporation,
such partnership, limited liability company or other applicable like action, on
the part of such Investor. Each of this Agreement and the Registration Rights
Agreement has been duly executed by such Investor, and when delivered by such
Investor in accordance with terms hereof, will constitute the valid and binding
obligation of such Investor, enforceable against it in accordance with its
terms.

                  (b) Investment Intent. Such Investor is acquiring the
Securities as principal for its own account for investment purposes only and not
with a view to or for distributing or reselling such Securities or any part
thereof, without prejudice, however, to such Investor's right at all times to

                                       12
<PAGE>

sell or otherwise dispose of all or any part of the Shares pursuant to the
Registration Statement or in compliance with applicable federal and state
securities laws. Subject to the immediately preceding sentence, nothing
contained herein shall be deemed a representation or warranty by such Investor
to hold the Securities for any period of time. Such Investor is acquiring the
Securities hereunder in the ordinary course of its business. Such Investor (i)
does not have any agreement or understanding, directly or indirectly, with any
Person to distribute any of the Securities (other than such Investor's right to
sell the Shares pursuant to the Registration Statement), (ii) has no present
plan, intention or understanding and has made no arrangement to sell any Common
Stock or the Shares, Warrants or Warrant Shares at any predetermined time or for
any predetermined price, and (iii) has not purchased, sold or entered into any
put option, short position or similar arrangement with respect to the Common
Stock or the Shares, Warrants or Warrant Shares

                  (c) Investor Status. At the time such Investor was offered the
Securities, it was, and at the date hereof it is, an "accredited investor" as
defined in Rule 501(a) under the Securities Act. Such Investor is not a
registered broker-dealer under Section 15 of the Exchange Act.

                  (d) General Solicitation. Such Investor is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.

                  (e) Access to Information. Such Investor acknowledges that it
has reviewed the Disclosure Materials and has been afforded the opportunity to
ask such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities. Such Investor is sophisticated and has prior
experience with investments comparable to the Securities. Neither such inquiries
nor any other investigation conducted by or on behalf of such Investor or its
representatives or counsel shall modify, amend or affect such Investor's right
to rely on the truth, accuracy and completeness of the Disclosure Materials and
the Company's representations and warranties contained in the Transaction
Documents.

                  (f) Independent Investment Decision. Such Investor has
independently evaluated the merits of its decision to purchase Securities
pursuant to this Agreement, such decision has been independently made by such
Investor and such Investor confirms that it has only relied on the advice of its
own business and/or legal counsel and not on the advice of any other Investor's
business and/or legal counsel in making such decision.

                  (g) No Group. Other than Affiliates of such Investor who are
also Investors under this Agreement, such Investor is not under common control
with or acting in concert with any other Investor and is not part of a "group."
No Investor, together with its Affiliates, will, following the Closing of the
transactions contemplated hereby, beneficially own more than 20% of the voting
power of the Company's then-outstanding capital stock.

                                       13
<PAGE>

         The Company acknowledges and agrees that each Investor does not make or
has not made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 3.2.

                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

         4.1      (a) Securities may only be disposed of in compliance with
state and federal securities laws. In connection with any transfer of the
Securities other than pursuant to an effective registration statement, to the
Company, to an Affiliate of an Investor who qualifies as an accredited investor
under Regulation D under the Securities Act of 1933, or in connection with a
pledge of Shares as contemplated in Section 4.1(b), the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected by
the transferor, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Securities under the Securities Act.

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

                  THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES
                  AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
                  STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
                  THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
                  AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
                  TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
                  ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
                  TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
                  THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
                  SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
                  THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
                  REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE
                  PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED
                  BY SUCH SECURITIES.

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

                                       14
<PAGE>

                  (c) Certificates evidencing the Shares shall not contain any
legend other than the rights plan legend (including the legend set forth in
Section 4.1(b)): (i) following a sale of such Securities pursuant to an
effective registration statement (including the Registration Statement), or (ii)
following a sale of such Shares pursuant to Rule 144, or (iii) while such Shares
are eligible for sale under Rule 144(k), or (iv) if such legend is not required
under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the Commission).
Following such time as restrictive legends are not required to be placed on
certificates representing Shares, the Company will, no later than three Trading
Days following the delivery by an Investor to the Company or the Company's
transfer agent of a certificate representing such Shares containing a
restrictive legend, deliver or cause to be delivered to such Investor a
certificate representing such Shares that is free from all restrictive and other
legends, but excluding a legend regarding the Company's rights plan. The Company
may not make any notation on its records or give instructions to any transfer
agent of the Company that enlarge the restrictions on transfer set forth in this
Section.

         4.2 Furnishing of Information. As long as any Investor owns the
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. As long as any Investor owns Securities, but only until all such
Securities may be sold under Rule 144(k), if the Company is not required to file
reports pursuant to such laws, it will prepare and furnish to the Investors and
make publicly available in accordance with Rule 144(c) such information as is
required for the Investors to sell such Securities under Rule 144. The Company
further covenants that it will take such further action as any holder of
Securities may reasonably request, all to the extent required from time to time
to enable such Person to sell such Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144.

         4.3 Integration. The Company shall not, and shall use its best efforts
to ensure that no Affiliate of the Company shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities to the Investors hereunder in a manner that
would require the registration under the Securities Act of the sale of the
Securities to the Investors, or that would be integrated with the offer or sale
of the Securities for purposes of the rules and regulations of any Trading
Market.

         4.4 Subsequent Registrations. Other than pursuant to the Registration
Statement, prior to the Effective Date, the Company may not file any
registration statement (other than on Form S-8 or if required by contract
disclosed in Schedule 3.1(v)) with the Commission with respect to any securities
of the Company.

                                       15
<PAGE>

         4.5 Securities Laws Disclosure; Publicity. By 8:30 a.m. (New York time)
on the Trading Day following the Closing Date, the Company shall issue a press
release reasonably acceptable to the Investors disclosing the transactions
contemplated hereby and file a Current Report on Form 8-K within one Trading Day
thereafter disclosing the material terms of the transactions contemplated hereby
In addition, the Company will make such other filings and notices in the manner
and time required by the Commission and the Trading Market on which the Common
Stock is listed or quoted. Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Investor, or include the name of any Investor
in any filing with the Commission (other than the Registration Statement and any
exhibits to filings made in respect of this transaction on Form 8-K or other
reports in accordance with periodic filing requirements under the Exchange Act)
or any regulatory agency or Trading Market, without the prior written consent of
such Investor, except to the extent such disclosure is required by law or
Trading Market regulations, in which case the Company shall provide the
Investors with prior notice of such disclosure.

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

         4.7 Indemnification. In addition to the indemnity provided in the
Registration Rights Agreement, each of the parties hereto indemnify and hold
each other and their respective directors, officers, shareholders, partners,
employees and agents (each, a "Party") harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys' fees and costs of investigation (collectively, "Losses") that any
such indemnified Party may suffer or incur as a result of or relating to any
misrepresentation, breach or inaccuracy of any representation, warranty,
covenant or agreement made by the indemnifying Party in any Transaction
Document. The Company will reimburse any such indemnified Party for its
reasonable legal and other expenses indemnified by the Company hereunder
(including the cost of any investigation, preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are incurred.

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

         4.9 Use of Proceeds. The Company shall use the net proceeds from the
sale of the Securities hereunder for working capital or other general corporate
purposes (including, without limitation, acquisitions) and not for the
satisfaction of any portion of the Company's debt (other than payment of
expenses of this offering, and trade payables and accrued expenses in the
ordinary course of the Company's business and prior practices), to redeem any
Common Stock or Common Stock Equivalents or to settle any outstanding Action.

                                       16
<PAGE>

         4.10 Reservation of Common Stock. The Company shall continue to reserve
and keep available at all times, free of preemptive rights or similar rights, a
sufficient number of shares of Common Stock for the purpose of enabling the
Company to issue the Shares pursuant to this Agreement and the Warrant Shares
upon exercise of the Warrants.

         4.11 Listing of Common Stock. The Company hereby agrees to use
commercially reasonable efforts to maintain the listing of its Common Stock on
the Trading Market on which the Common Stock is currently listed or quoted, and
as soon as reasonably practicable following the Closing (but not later than the
Effective Date) to list all of the Shares on such Trading Market. The Company
further agrees, if the Company applies to have the Common Stock traded on any
other Trading Market, it will include in such application the Shares, and will
take such other action as is necessary or desirable in the opinion of the
Investors to cause all of the Shares to be listed on such other Trading Market
as promptly as possible. The Company will take all action reasonably necessary
to continue the listing and trading of its Common Stock on the Trading Market on
which the Common Stock is currently listed or quoted and will comply in all
respects with the Company's reporting, filing and other obligations under the
bylaws or rules of such Trading Market. This Section 4.11 shall not apply if the
Company ceases to have a publicly traded class of securities as a result of an
acquisition.

         4.12 Shareholders Rights Plan. No Investor will become an "Acquiring
Person" under any shareholders rights plan or similar plan or arrangement in
effect or hereafter adopted by the Company, and no Investor could be deemed to
trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents.

                                   ARTICLE V.
                              CONDITIONS PRECEDENT

         5.1 Conditions Precedent to the Obligations of the Investors to
Purchase Securities. The obligation of each Investor to acquire Securities at
the Closing is subject to the satisfaction or waiver by such Investor, at or
before the Closing, of each of the following conditions:

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

                  (b) Performance. The Company shall have performed, satisfied
and complied with all covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by it at or
prior to the Closing;

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

                  (d) Adverse Changes. Since the date of execution of this
Agreement, no event or series of events shall have occurred that reasonably
would be expected to have or result in:

                                       17
<PAGE>

                     (i) an adverse effect on the legality, validity or
enforceability of any Transaction Document, or

                     (ii) a Material Adverse Effect;

                  (e) No Suspensions of Trading in Common Stock; Listing.
Trading in the Common Stock shall not have been suspended by the Commission or
any Trading Market (except for any suspensions of trading of not more than one
Trading Day solely to permit dissemination of material information regarding the
Company) at any time since the date of execution of this Agreement, and the
Common Stock shall have been at all times since such date listed for trading on
a Trading Market; and

                  (f) Timing. The Closing shall have occurred no later than
February 17, 2004.

         5.2 Conditions Precedent to the Obligations of the Company to sell
Securities. The obligation of the Company to sell Securities at the Closing is
subject to the satisfaction or waiver by the Company, at or before the Closing,
of each of the following conditions:

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

                  (b) Performance. Each Investor shall have performed, satisfied
and complied with all covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by such
Investor at or prior to the Closing;

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

                  (d) Timing. The Closing shall have occurred no later than
February 17, 2004.

                                   ARTICLE VI.
                                  MISCELLANEOUS

         6.1 Fees and Expenses. Except for the reasonable fees and expenses of
legal counsel for 033 Asset Management incurred in connection with review and
negotiation of the Transaction Documents which shall be paid by the Company on
the Closing Date up to a maximum of $25,000, each Investor and the Company shall
pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of the Transaction
Documents. The Company shall pay all stamp and other taxes and duties payable on
the Company's issuance of the Securities at closing.

         6.2 Entire Agreement. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

                                       18
<PAGE>

         6.3 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Section prior to 6:30 p.m. (New York City time) on a Trading
Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section on a day that is not a Trading Day or later than 6:30 p.m. (New
York City time) on any Trading Day, (c) the Trading Day following the date of
mailing, if sent and delivered by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt by the party to whom such notice is required
to be given. The address for such notices and communications shall be as
follows:

         If to the Company:  Hollywood Media Corp.
                             2255 Glades Rd.
                             Suite 221A
                             Boca Raton, FL  33431
                             Attn:  Mitchell Rubenstein

         With a copy to:     Nina Gordon
                             Broad and Cassel
                             7777 Glades Road
                             Suite 300
                             Boca Raton, FL  33434

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

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

         6.4 Amendments; Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed by the Company and the Investor
or Investors holding no less than 66 ?% of the outstanding Shares. No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right.

         6.5 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party. This Agreement
shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the Transaction
Documents.

                                       19
<PAGE>

         6.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each of the Investors. Any Investor may
assign any or all of its rights under this Agreement to any Person to whom such
Investor assigns or transfers any Securities, provided such transferee agrees in
writing to be bound, with respect to the transferred Securities, by the
provisions hereof that apply to the "Investors" and makes the representations
set forth in Section 3.2 hereof.

         6.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.7 (as to each
Investor Party).

         6.8 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all Proceedings to resolve any dispute among the parties concerning
the interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective Affiliates, employees or agents having rights
hereunder) shall be commenced exclusively in the state and federal courts
sitting in the City of New York, Borough of Manhattan (the "NEW YORK COURTS"),
although depositions may be taken in other locations. Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of the any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any such New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby. If either
party shall commence a Proceeding to enforce any provisions of a Transaction
Document, then the prevailing party in such Proceeding shall be reimbursed by
the other party for its attorney's fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such Proceeding.

         6.9 Survival. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and the delivery of the Securities.

                                       20
<PAGE>

         6.10 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

         6.11 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

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

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

         6.14 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Investors and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

         6.15 Payment Set Aside. To the extent that the Company makes a payment
or payments to any Investor pursuant to any Transaction Document or an Investor
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law

                                       21
<PAGE>

(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

         6.16 Independent Nature of Investors' Obligations and Rights. The
obligations of each Investor under any Transaction Document are several and not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document. The decision of each Investor to
purchase Securities pursuant to the Transaction Documents has been made by such
Investor independently of any other Investor. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its
investment in the Securities or enforcing its rights under the Transaction
Documents. Each Investor shall be entitled to independently protect and enforce
its rights, including without limitation the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. Each Investor is represented by its own counsel and
is not relying on counsel of any other Investor or of any broker or placement
agent in connection with this matter.

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

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                             SIGNATURE PAGES FOLLOW]

                                       22
<PAGE>

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

                                         HOLLYWOOD MEDIA CORP.

                                         By: /s/ Scott Gomez
                                            -------------------------------
                                         Name: Scott Gomez
                                         Title: Vice President of Finance
                                                and Accounting

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

                                       23
<PAGE>

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

                                        [INVESTOR]

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

                                        Investment Amount: $[ ]

                                        Address for Notice and Residence:

                                       24

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