Document:

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                                                                       EXHIBIT A

                           HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER
APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH SECURITIES
LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR ANY SECURITIES ISSUABLE
UPON THE CONVERSION HEREOF MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED OTHER THAN (A) TO HMG WORLDWIDE CORPORATION (THE "COMPANY") OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO RULE 144 UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT, (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT; THE HOLDER OF THIS CERTIFICATE
AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY OR ANY SECURITY
ISSUED UPON CONVERSION HEREOF IS TRANSFERRED (UNLESS SUCH SECURITY IS
TRANSFERRED PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
PROPOSED TRANSFER PURSUANT TO CLAUSES (B), (C) OR (D) ABOVE, THE COMPANY MAY
REQUIRE THAT THE TRANSFEROR FURNISH IT WITH AN OPINION OF COUNSEL CONFIRMING
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", AND "UNITED STATES" HAVE THE
RESPECTIVE MEANINGS ASSIGNED TO THEM IN REGULATION S UNDER THE SECURITIES ACT.

Certificate No.                                             U.S. $
               ------                                             ---------

FOR VALUE RECEIVED, HMG WORLDWIDE CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware (the "Company"), hereby
promises to pay to , or registered assigns, the principal sum of $ (or such
lesser amount as a result of partial conversions of this Note as set forth on
Schedule I hereto) on March 15, 2003 (unless such date is extended as provided
on the reverse hereof), and to pay interest thereon in the manner set forth on
the reverse hereof from March 15, 2000 at the rate of 7% per annum until the
principal hereof is paid or made available for payment. Reference is hereby made
to the further provisions set forth on the reverse hereof, which provisions
shall for all purposes have the same effect as if set forth in this place.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
by an officer thereunto duly authorized.

Dated:                                    HMG WORLDWIDE CORPORATION

                                          By:
                                             --------------------------------
                                          Name:   Robert V. Cuddihy, Jr.
                                          Title:  Chief Operating Officer and
                                                   Chief Financial Officer

<PAGE>

                               - REVERSE OF NOTE -

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

1. ISSUANCE. This Note is one of a duly authorized issue of Notes of the Company
designated as its 7% Convertible Notes Due March 15, 2003 in an aggregate
principal amount of $1,500,000. This Note (together with the other Notes issued
as of the date of execution of this Note) amends and restates in its entirety
the Notes of similar tenor originally issued by the Company dated March 15,
2000.

2. INTEREST. The Company promises to pay interest on the principal amount of
this Note at the rate of 7 % per annum; provided that the applicable rate of
interest on this Note will increase to 15% per annum upon the occurrence of the
events described in Section 4(a) below. Interest on this Note will accrue from
March 15, 2000 until payment in full of the principal amount hereof has been
made or duly provided for and will be based on the actual number of days and
months elapsed and computed on a 360-day year consisting of twelve 30-day
months. Interest shall be payable in arrears on the earlier to occur of (i) the
date of conversion to Common Stock (as defined in Section 4 below) as provided
herein of all or a portion of this Note (if this Note shall be converted in
part, then interest only with respect to the portion of this Note so converted
shall be payable at such time) and (ii) the Maturity Date. The "Maturity Date"
shall mean March 15, 2003; provided, however, that such date shall be extended
by two days for each day (i) in excess of 120 days from the date of original
issuance of this Note that the Registration Statement (as defined in the
Registration Rights Agreement entered into on the date of original issuance of
the Notes between the Company and the original purchasers of the Notes) is not
declared effective and (ii) subsequent to which the Registration Statement is
declared effective that the Holder is unable to sell Common Stock pursuant to
the Registration Statement. Interest on this Note is payable to the holder of
this Note registered on the books of the Company (the "Holder") at the option of
the Company in the form of either (i) such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts or (ii) the number of full shares of Common Stock which the amount
of interest payable would entitle the Holder to acquire based upon a price per
share equal to the Conversion Price (as defined in Section 4 below). The Company
shall notify the Holder in writing within one (1) business day of the date
Notice of Conversion (as hereinafter defined) by the Holder is received by the
Company or five (5) business days prior to the Maturity Date, as applicable, of
the form in which the Company elects to pay accrued interest. In the event the
Company fails to timely provide such notice, payments of interest shall be in
Common Stock.

3. PRINCIPAL. On the Maturity Date, upon surrender of this Note by the Holder to
the Company, the Company shall pay to the Holder the outstanding principal
amount hereof in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts,
together with accrued interest on such outstanding principal amount as set forth
in Section 2 above.

                                      -A2-
<PAGE>

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

4. CONVERSION.

         (a) Conversion Price; Amount; Maximum Share Issuance. Subject to this
Section 4, the Holder of this Note has the right to convert this Note, in whole
or from time to time in part, into shares of common stock, par value $.01 per
share, of the Company (the "Common Stock"). The price at which the Holder may
convert this Note (or any portion thereof) into shares of Common Stock (the
"Conversion Price") shall be the lesser of (i) $9.60 (the "Maximum Conversion
Price") and (ii) the average of the two lowest Closing Prices (as defined below)
of the Common Stock during the 30 trading days preceding (but excluding) the
Date of Conversion (as defined below) (the "Variable Conversion Price"). The
"Closing Price" with respect to the per share price of Common Stock on any day
means the last reported bid price regular way on Nasdaq Small Cap Market (or the
Nasdaq National Market, the New York Stock Exchange or American Stock Exchange
in the event any such market or exchange constitutes the principal market on
which the Common Stock is quoted or listed or admitted to trading) (such four
markets and exchanges, the "Approved Markets") or, if not quoted or listed or
admitted to trading on any such market or exchange, the closing bid price in the
over-the-counter market as furnished by any New York Stock Exchange member firm
that is selected from time to time by the Company for that purpose. In lieu of
any fractional share of Common Stock to which the Holder would otherwise be
entitled upon conversion of this Note (or portion thereof), the number of shares
of Common Stock issuable upon conversion of this Note shall be rounded up to the
nearest whole number. In the case of a dispute as to the calculation of the
Conversion Price, the Holder's calculation shall be deemed conclusive absent
manifest error.

         The maximum number of shares of Common Stock (the "Maximum Share
Issuance") issuable upon conversion of all or any portion of the Notes
(including shares of Common Stock that (x) the Company elects to issue in
payment of interest as provided in Section 2 hereof and (y) the Holder elects to
receive in the form of Common Stock, if any, pursuant to the Registration Rights
Agreement (as defined below) is 2,595,000 (subject to adjustment for stock
splits, stock dividends, reclassification or other similar events). In the event
there is more than one Holder of Notes, the unused portion of the Maximum Share
Issuance shall be allocated on a pro rata basis among the Holders based upon the
aggregate outstanding principal amount of Notes. As of the date on which the
Maximum Share Issuance has occurred in respect of a Holder's entire position of
Notes (and, accordingly, such Holder is unable to convert its remaining
principal amount of the Notes held by such Holder), the interest rate shall
permanently increase to 15% per annum and shall be payable in arrears in cash on
the last calendar day of each subsequent month (regardless of whether the
allocable Maximum Share Issuance applicable to such Holder's Notes subsequently
increases as a result of conversions by other Holders or otherwise).

                                      -A3-
<PAGE>

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

         Notwithstanding any other provision of this Section 4, as of any date
prior to the Maturity Date, the aggregate number of shares of Common Stock into
which this Note, all other Notes and all other securities convertible into
Common Stock held by the Holder of this Note and its affiliates shall be
convertible, together with the shares of Common Stock then beneficially owned
(as defined in the U.S. Securities Exchange Act of 1934, as amended) by such
Holder and its affiliates (excluding shares of Common Stock otherwise deemed
beneficially owned as a result of the convertibility of the Notes and other
securities convertible into Common Stock held by the Holder or its affiliates),
shall not exceed 4.9% of the total outstanding shares of Common Stock as of such
date. In addition, notwithstanding any other provision of this Section 4, during
any consecutive 61- day period no Holder (together with its affiliates) may (x)
convert its Notes and other securities convertible into Common Stock into a
number of shares of Common Stock exceeding 9.9% of the Corporation's issued and
outstanding shares of Common Stock as of the first day of such 61-day period or
sell shares of Common Stock (whether acquired upon conversion of the Notes or
other securities convertible into Common Stock or otherwise in excess of 9.9% of
the Company's issued and outstanding shares of Common Stock as of the first day
of such 61-day period) (the "9.9% Limitation"). Notwithstanding any other
provision of this Notes, the foregoing limitations on conversion may not be
waived, amended or modified. The Company shall have no obligation to monitor
compliance with the foregoing limitations on conversion.

         (b) Mechanics of Conversion. To convert this Note (or a portion
thereof) the Holder must (i) complete and sign the Notice of Conversion set
forth as Exhibit A to this Note (the "Notice of Conversion") and deliver the
Notice of Conversion to the Company as herein provided and (ii) on or prior to
the date on which delivery of Common Stock is required to be made hereunder, (x)
deliver this Note, duly endorsed, to the Company and (y) pay any transfer or
similar tax if required. The Holder shall surrender this Note and the Notice of
Conversion to the Company (with an advance copy by facsimile of the Notice of
Conversion). The date on which Notice of Conversion is given (the "Date of
Conversion") shall be deemed to be the date of receipt by the Company of the
facsimile of the Notice of Conversion, provided that this Note is received by
the Company within five (5) business days thereafter. The Company shall not be
obligated to cause the transfer agent for the Common Stock (the "Transfer
Agent") to issue certificates evidencing the shares of Common Stock issuable
upon such conversion unless either this Note has been received by the Company
or, if this Note has been lost, stolen or destroyed, the Holder executes an
agreement satisfactory to the Company to indemnify the Company from any loss
incurred by it in connection with this Note.

         The Company shall cause the Transfer Agent with respect to its Common
Stock, which Transfer Agent is participating in the Depository Trust Company
("DTC") Fast Automated Securities

                                      -A4-
<PAGE>

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

Transfer ("FAST") program, to electronically transmit the shares of Common Stock
issuable to the Holder upon conversion of this Note by crediting the account of
the Holder's prime broker with DTC through DTC's Deposit Withdrawal Agent
Commission ("DWAC") system, within three (3) business days after delivery to the
Company of this Note to the Holder. In the event the Holder otherwise elects in
writing, however, the Company shall cause the Transfer Agent to issue and
deliver (within such three (3) business day period) at the address of the Holder
on the books of the Company, as contemplated by the Securities Purchase
Agreement or as otherwise directed pursuant to the Notice of Conversion, a
certificate or certificates for the number of shares of Common Stock to which
such Holder shall be entitled as aforesaid. In the event the Company fails to
complete such delivery as aforesaid, it shall be responsible for actual damages
incurred by the Holder as a result thereof. The person or persons entitled to
receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock on such date. Notwithstanding that the Holder is required to
deliver this Note, duly endorsed, within five (5) business days after the Date
of Conversion, if this Note is not received by the Company within ten (10)
business days after the Date of Conversion, the Notice of Conversion shall
become null and void. Notwithstanding the foregoing, in the event, the Holder
delivers to the Company a Notice of Conversion with respect to all or a portion
of this Note, which Notice of Conversion specifies a Conversion Price of less
than $2.50 (subject to adjustment in the same manner that the Maximum Conversion
Price is subject to adjustment pursuant to Section 4(d) hereof), the period for
the Company to cause the Transfer Agent to comply with the foregoing
requirements of this paragraph shall be extended to the later to occur of (a)
three (3) business days after delivery to the Company of this Note or (b) three
(3) business days after the expiration of the two business day period
contemplated by Section 13 hereof during which the Company shall have the right
to give notice of its election to redeem the portion of this Note with respect
to which such Notice of Conversion has been given; provided, however, that, in
the event following the giving of such notice of the Company's election to
redeem the portion of this Note with respect to which such Notice of Conversion
has been given, the Holder (as contemplated by such Section 13) gives timely
written notice of the Holder's election to convert such portion of this Note at
a Conversion Price of $2.50 (subject to adjustment in the same manner that the
Maximum Conversion Price is subject to adjustment pursuant to Section 4(d)
hereof), the period for the Company to cause the Transfer Agent to comply with
the foregoing requirements of this paragraph shall be extended to the later to
occur of (a) three (3) business days after delivery to the Company of this Note
or (b) three (3) business days after the delivery to the Company of such written
notice of the Holder to so convert.

         Following conversion of this Note, or a portion thereof, the principal,
together with the interest payable on this Note, or portion thereof so
converted, will be deemed paid in full and satisfied, and such Note or portion
thereof will no longer be outstanding. In the event this Note is

                                      -A5-
<PAGE>

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

converted in part, the Company will issue to the Holder a new Note in a
principal amount equal to the portion of this Note not converted or shall
endorse this Note to reflect such conversion.

         (c) Reservation of Stock Issuable Upon Conversion. The Company shall at
all times reserve and keep available out of its authorized but unissued shares
of Common Stock or shares of Common Stock held in treasury, or both, solely for
the purpose of effecting the conversion of this Note, a number of shares of
Common Stock equal to the Maximum Share Issuance.

         (d) Adjustment to Fixed Conversion Price and the Variable Conversion
Price.

                  (i) If, prior to the conversion of the entire principal amount
of this Note, the number of outstanding shares of Common Stock is increased by a
stock split, stock dividend of shares of Common Stock or other shares of capital
stock, reclassification or other similar event, the Maximum Conversion Price,
and if applicable, the Variable Conversion Price (together, the "Conversion
Prices") shall be proportionately reduced, or if the number of outstanding
shares of Common Stock is decreased by a combination or reclassification of
shares or other similar event, the Conversion Prices shall be proportionately
increased, in each case, such that the Holder of this Note will have the right
to receive upon conversion of this Note the number of shares of Common Stock (or
other shares of Capital Stock) of the Company (notwithstanding the limitation
set forth in the third paragraph of Section 4(a)) which such Holder would have
been entitled to receive had the Holder converted this Note immediately prior to
such action.

                  (ii) If, prior to the conversion of the entire principal
amount of this Note, there shall be any merger, consolidation, exchange of
shares, recapitalization, reorganization or other similar event (a "Conversion
Reclassification Event"), as a result of which shares of Common Stock of the
Company shall be changed into the same or a different number of shares of the
Company or the same or another class or classes of stock or securities of the
Company or another entity, then the Holder of this Note shall thereafter have
the right to receive upon conversion of this Note, upon the basis and the terms
and conditions specified herein, such shares of stock and/or securities as may
be issued or payable with respect to or in exchange for the number of shares of
Common Stock immediately theretofore receivable upon the conversion of this Note
(irrespective of the limitations set forth in Section 4(a)) had such Conversion
Reclassification Event not taken place, and in any such case appropriate
provisions shall be made with respect to the rights and interests of the Holder
of this Note such that the provisions hereof (including, without limitation,
provisions for adjustment of the Conversion Price and of the number of shares
issuable upon conversion of this Note) shall thereafter be applicable, as nearly
as may be practicable in relation to any shares of stock or securities
thereafter deliverable upon the conversion of this Note. The Company shall not
effect any Conversion Reclassification Event unless the resulting successor or
acquiring entity (if not the

                                      -A6-
<PAGE>

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

Company) assumes by written instrument the obligation to deliver to the Holder
of this Note such shares of stock and/or securities as the Holder of this Note
is entitled to receive upon conversion in accordance with the foregoing.

                  (iii) In addition to the adjustments set forth above, if the
Company distributes to all holders of its Common Stock any of its assets or debt
securities or any rights or warrants to purchase securities other than Common
Stock, then the Conversion Prices shall be adjusted in such a manner as shall be
agreed to by the Company and the Holder as shall fairly preserve the economic
rights and benefits of the Holder as contemplated by this Note. In the event
that within 15 days of any such event, the Company and the Holder do not reach
an agreement as to the appropriate adjustment, the Company shall retain, and pay
for, a nationally recognized investment bank or accounting firm to determine the
appropriate adjustment as soon as possible, but in any event not later than 45
days from the date of such event.

                  No adjustment shall be required for cash dividends or
distributions except to the extent that any such cash dividend or distribution
made on any date would, upon payment, cause the aggregate fair market value (as
determined in good faith by the Board of Directors, whose determination shall be
conclusive) of all such dividends and distributions which have occurred on such
date and during the 365-day period immediately preceding such date (other than
any dividends or distributions in respect of which an adjustment to the
Conversion Prices pursuant to this Section 4(d) had previously been made) exceed
the product of (x) .20 times (y) the Closing Price on the record date for such
most recent dividend or distribution times (z) the number of shares of Common
Stock outstanding on such date.

                  (iv) In the event that the Company shall at any time after the
date of the issuance of this Note (A) issue shares of Common Stock without
consideration (other than in the form of a dividend) or at a price per share
less than the Closing Price on the date of issue, (B) issue options, rights or
warrants to subscribe for or purchase Common Stock (or securities convertible
into Common Stock) without consideration or at a price per share (or having a
conversion price per share, if a security convertible into Common Stock) less
than the Closing Price of the Common Stock on the date of issue (other than
options issued to employees pursuant to stock option plans in effect as of the
date of original issuance of the Notes) or (C) securities convertible into
Common Stock having a conversion price less than the Closing Price of the Common
Stock on the date of conversion, the Conversion Prices to be in effect after the
date of such issuance shall be adjusted by multiplying the Conversion Prices in
effect immediately prior to the date of any such issuances referenced above by a
fraction, of which the numerator shall be the number of shares of Common Stock
outstanding on the date of such issuance plus the number of shares of Common
Stock which the aggregate offering price of the total number of shares of Common
Stock so to be issued (or the aggregate initial

                                      -A7-
<PAGE>

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

conversion price of the convertible securities so to be issued) would purchase
at the Closing Price on the date of such issue and of which the denominator
shall be the number of shares of Common Stock outstanding on the date of such
issuance plus the number of additional shares of Common Stock to be issued (or
into which the convertible securities so to be issued are initially
convertible). In case the subscription price for such securities may be paid in
a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be conclusive. Such
adjustment shall be made successively whenever the date of such issuance is
fixed and, in the event that such shares or option, rights or warrants (or
portions thereof) expire without being issued, the Conversion Price shall again
be adjusted to reflect such occurrence.

                  (v) Adjustments to the Maximum Conversion Price pursuant to
this Section 4 shall be permanent. Adjustment to the Variable Conversion Price
pursuant to this Section 4 shall be made only to the extent an event requiring
adjustment occurs during the period that the Variable Conversion Price is
required to be calculated to determine the Conversion Price by making
adjustments to the applicable Closing Prices within such period.

                  (vi) If any adjustment under this Section 4(d) would create a
fractional share of Common Stock or a right to acquire a fractional share of
Common Stock, such fractional share shall be disregarded and the number of
shares of Common Stock issuable upon conversion shall be the next higher number
of shares.

5. RANKING. The Notes constitute senior unsecured indebtedness of the Company,
rank pari passu in right of payment with other unsubordinated and unsecured
indebtedness of the Company and rank senior in right of payment to all
subordinated indebtedness of the Company.

6. REGISTERED HOLDER. The Company may for all purposes treat the registered
holders on its books and records of this Note as the Holder.

7. DENOMINATIONS. Notes (and any Note issued in exchange, upon transfer or upon
conversion) may be issued in a minimum principal amount of $100,000 (or such
lesser amount upon a conversion in part of a Note provided such lesser amount
represents such Holder's entire holding of Notes).

8. EVENTS OF DEFAULT.

         (a)  An "Event of Default" under this Note occurs if:

                                      -A8-
<PAGE>

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

                  (1) the Company defaults in effecting a conversion of this
Note in accordance with the provisions hereof and such default continues for a
period of 10 days;

                  (2) the Company defaults in the payment of the principal of or
interest on this Note when the same becomes due and payable, including without
limitation, pursuant to Section 13 hereof;

                  (3) the Company fails to comply in any material respect with
any of its agreements in this Note or the provisions of the Securities Purchase
Agreement (the "Securities Purchase Agreement") or the Registration Rights
Agreement, each dated as of the date of the original issuance of this Note
between the Company and the original Holder of this Note (other than those
referred to in clauses (1) and (2) above), and such failure continues for 30
days after the notice specified below;

                  (4) indebtedness of the Company or any subsidiary is not paid
within any applicable grace period after maturity or is accelerated by the
holders thereof because of a default, the total amount of such indebtedness
unpaid or accelerated exceeds $1,000,000 and such default continues for 10 days
after the notice specified below;

                  (5) the Company or any subsidiary pursuant to or within the
meaning of any federal or state bankruptcy, insolvency or other law for the
relief of debtors ("Bankruptcy Law"):

                           (A) commences a voluntary case or proceeding;

                           (B) consents to the entry of an order for relief
                  against it in an involuntary case or proceeding;

                           (C) consents to the appointment of any receiver,
                  trustee, assignee, liquidator, custodian or similar official
                  under any Bankruptcy Law (a "Custodian") of it or for any
                  substantial part of its property; or

                           (D) makes a general assignment for the benefit of its
                  creditors;

or takes any comparable action under any foreign laws relating to insolvency;

                  (6) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:

                                      -A9-
<PAGE>

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

                           (A) is for relief against the Company or any
                  subsidiary in an involuntary case or proceeding;

                           (B) appoints a Custodian of the Company or any
                  subsidiary or for any substantial part of its property; or

                           (C) orders the winding up or liquidation of the
                  Company or any subsidiary;

or similar relief is granted under any foreign laws and the order or decree
remains unstayed and in effect for 60 days;

                  (7) the Common Stock (including, subsequent to the
effectiveness of the initial Registration Statement pursuant to the Registration
Rights Agreement, the shares of Common Stock issuable upon conversion of the
Notes) is not quoted or listed or admitted to trading on an Approved Market;

                  (8) a going private transaction under Rule 13e-3 under the
Exchange Act or a tender offer by the Company under Rule 13e-4 under the
Exchange Act is announced; or

                  (9) any final judgment or decree for the payment of money in
excess of $1,000,000 (to the extent not covered by insurance) is rendered
against the Company or any subsidiary and is not discharged and either (A) an
enforcement proceeding has been commenced by any creditor upon such judgment or
decree or (B) there is a period of 60 days following such judgment during which
such judgment or decree is not discharged, waived or the execution thereof
stayed and, in the case of (B), such default continues for 10 days after the
notice specified below.

         The foregoing will constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.

         A default under clause (3), (4), (7), (8) or (9) above is not an Event
of Default until the Holder of this Note notifies the Company of such default
and the Company does not cure such default within the time specified after
receipt of such notice. Such notice must specify the default, demand that it be
remedied and state that such notice is a "Notice of Default".

                                      -A10-
<PAGE>

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

         The Company shall deliver to the Holder of this Note, within 30 days
after the occurrence thereof, written notice of any event which with the giving
of notice, the lapse of time or both would become an Event of Default under
clause (3), (4), (7), (8) or (9) above, its status and what action the Company
is taking or proposes to take with respect thereto.

         (b) If an Event of Default (other than an Event of Default specified in
clauses (5) or (6) above) occurs and is continuing, the Holder of this Note may
declare the principal of and accrued interest on this Note to be immediately due
and payable and upon such declaration, an amount equal to 115% of such principal
and interest shall be due and payable immediately. If an Event of Default
specified in clauses (5) or (6) above occurs, the principal of and interest on
this Note shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Holder of this Note.

9. NO AMENDMENT. No provision of this Note may be amended, altered or modified
without the written agreement of the Holder and the Company.

10. NO VOTING RIGHTS. This Note shall not entitle the Holder hereof to any of
the rights of a stockholder of the Company, including without limitation, the
right to vote, to receive dividends and other distributions, or to attend any
meetings of stockholders or any other proceedings of the Company.

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

12. CHANGE OF CONTROL. Upon the notice or occurrence of, or announcement of the
Company's intent (or a third party's or parties' intent in the case of Change of
Control Transaction of the type set forth in clause (iii) of the definition of a
Change of Control Transaction) to engage in, a Change of Control Transaction,
then, this Note shall thereupon be convertible in full, notwithstanding the
limitations set forth in Section 4 hereof; provided that a holder's ability to
convert this Note shall cease three (3) trading days prior to the consummation
of a Change of Control Transaction of the type set forth in clauses (i) and (ii)
of the definition thereof. In addition, upon either the notice of, or the
announcement of the Company's intent to engage in, a Change of Control
Transaction (of the type set forth in clauses (i) and (ii) of the definition
thereof), shall have the right, up to and including the third trading day prior
to the date of effectiveness of such Change of Control

                                      -A11-
<PAGE>

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

Transaction, to elect redemption by the Company of this Note at a redemption
price equal to 125% of the principal amount thereof, plus accrued interest,
which redemption, in the case of such Change of Control Transaction, shall be
conditioned upon and shall be effective immediately prior to consummation of
such Change of Control Transaction. If the Holder does not make such an
election, this Note shall be deemed automatically converted into shares of
Common Stock immediately prior to the consummation of such Change of Control
Transaction, and the holder shall receive the same consideration that a holder
of Common Stock is entitled to receive in connection with such Change of Control
Transaction.

         A "Change of Control Transaction" shall mean, (i) the sale, conveyance
or disposition of all or substantially all of the assets of the Company, (ii) a
consolidation or merger of the Company with or into any other "Person" (whether
or not the Company is the surviving Person, but other than a merger or
consolidation whereby the stockholders of the Company immediately preceding the
merger or consolidation continue to own greater than 50% of the voting power of
the capital stock of the surviving Person in such merger or consolidation that
is normally entitled to vote in the election of directors, managers or trustees,
as applicable) or, (iii) any Person or any "group" (as such term is used in
Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), becomes the beneficial owner or is deemed to beneficially own (as
described in Rule 13d-3 under the Exchange Act without regard to the 60-day
exercise period) in excess of 50% of the Company's voting power of the capital
stock of the Company normally entitled to vote in the election of directors of
the Company (other than (A) any group that held such voting power as of the date
of original issuance of this Note, or (B) any group that holds such voting power
subsequent to the date or original issuance of this Note, provided that the
persons that constitute such group include the majority of the members of, and
at least 50% of the voting power held by, a group referenced in clause (A)). The
Company shall promptly mail written notice of either the occurrence of, or the
announcement of the Company's intent to engage in, a Change of Control
Transaction (with a copy sent by facsimile), but in any event such notice (other
than, if applicable, in the case of a Change of Control Transaction of the type
set forth in clause (iii)) shall not be given less than twenty (20) days prior
to the effective date of such Change of Control Transaction to the Holder.

13. REDEMPTION AT THE OPTION OF THE COMPANY. At any time after the date of
original issuance of the Notes, upon delivery by the Holder to the Company of a
Notice of Conversion with respect to all or a portion of this Note, which Notice
of Conversion specifies a Conversion Price of less than $2.50 (subject to
adjustment in the same manner that the Maximum Conversion Price is subject to
adjustment pursuant to Section 4(d) hereof), the Company shall have the right,
provided that written notice is given to the Holder by the close of business on
the second business day following the receipt by the Company of such Notice of
Conversion, to redeem the entire principal amount of this Note with respect to
which such Notice of Conversion was so received, provided that

                                      -A12-
<PAGE>

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

(i) the Holder shall not have elected, by written notice given by the Holder to
the Company by the close of business on the third business day after having
received timely notice of the Company's election to redeem the portion of this
Note with respect to which such Notice of Conversion was so received, to convert
such portion of this Note at a Conversion Price of $2.50 (subject to adjustment
in the same manner that the Maximum Conversion Price is subject to adjustment
pursuant to Section 4(d) hereof), (ii) no Event of Default (or event which upon
the giving of notice, passage of time or both would constitute an Event of
Default) under the Notes shall have occurred and be continuing as of each of the
date of notice of redemption and date of redemption; (iii) neither such notice
of redemption nor the redemption shall constitute an Event of Default (or event
which upon the giving of notice, passage of time or both would constitute an
Event of Default) under the Notes; and (iv) as of each of the date of notice of
redemption and the date of redemption, the Company shall be Solvent (as defined
in the Securities Purchase Agreement) and neither of such notice of redemption
nor such redemption shall result in the Company no longer being Solvent. The
redemption price payable by the Company shall be an amount in cash equal to 110%
of the aggregate principal amount of, plus accrued and unpaid interest on, the
portion of the Note being redeemed through the date of redemption and shall be
payable, no later than 21 calendar days following the date of receipt by the
Company of the applicable Notice of Conversion.

14. GOVERNING LAW. This Note shall be governed by, enforced under and construed
in accordance with the laws of the State of New York, without giving effect to
the principles of conflicts of laws thereof.

15. BUSINESS DAY DEFINITION. For purposes hereof, the term "business day" shall
mean any day on which banks are generally open for business in the City of New
York.

16. NOTICE. Any notice or other communication required or permitted to be given
hereunder shall be given as provided herein or delivered against receipt if to
(i) the Company at 475 Tenth Avenue, New York, New York 10018-1199; Facsimile
No.: 212-564-3395, Attention: Chief Financial Officer and (ii) the Holder of
this Note, to such Holder at its last address as shown on the Note register (or
to such other address as any such party shall have furnished to the Company in
writing). Any notice or other communication mailed or otherwise delivered shall
be deemed given at the time of receipt thereof.

                                      -A13-
<PAGE>

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

17. WAIVER.

         (a) The Company hereby waives presentment for payment, notice of
dishonor, protest and notice of protest and, in the event of default hereunder,
the Company agrees to pay all costs of collection, including reasonable
attorneys' fees.

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

18. UNENFORCEABLE PROVISIONS. If any provision of this Note is invalid, illegal
or unenforceable, the remaining provisions of this Note shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.

                                      -A14-
<PAGE>

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

                                                                      SCHEDULE I

                   REDUCTION OF PRINCIPAL AMOUNT ON CONVERSION

         The following reductions of the principal amount of this Note upon
partial conversions thereof have been made:

<TABLE>
<CAPTION>
                                        Principal                                                 Notation Made
                                        Amount of              Aggregate Principal               by or on Behalf
Date of Conversion                      Reduction               Amount resulting                   of Company
------------------                      ---------               ----------------                   ----------

<S>                                     <C>                    <C>                               <C>
---------                               ---------                  ---------                        ---------

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

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

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

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

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

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

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

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

---------                               ---------                  ---------                        ---------
</TABLE>

                                     -A15-
<PAGE>

                HMG WORLDWIDE CORPORATION - NOTICE OF CONVERSION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

 (To be executed by the Holders in order to convert the Note or portion thereof)

The undersigned hereby irrevocably elects to convert [the entire principal
amount] [$ principal amount] of Note No. into shares of Common Stock, $.01 par
value (the "Common Stock"), of HMG Worldwide Corporation (the "Company") as of
the Date of Conversion (which shall be the first date of receipt by the Company
of this Notice of Conversion, whether by facsimile or otherwise). If shares are
to be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates as reasonably requested by the Company or its
Transfer Agent. No fee will be charged to the Holder for any conversion, except
for transfer taxes, if any.

The undersigned represents and warrants that all offers and sales by the
undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the Note shall be made pursuant to registration under the
Securities Act or in compliance with an exemption from registration under the
Securities Act. The undersigned also represents and warrants that the number of
shares of Common Stock to be received upon conversion, together with the shares
of Common Stock beneficially owned by the undersigned (and its affiliates) on
the Date of Conversion (excluding shares of Common Stock otherwise deemed
beneficially owned as a result of the convertibility of such Notes held by the
undersigned a its affiliates), do not exceed 4.9% of the outstanding shares of
Common Stock of the Company (as set forth in the Company's most recent filing
with the Securities and Exchange Commission unless the Company shall notify the
Holder that a greater or lesser number of shares is outstanding).

If the stock certificate is to be made out in another person's name, fill in the
form below:

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

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

------------------------
(Print or type other person's name, address and zip code)

------------------------
(Insert assignee's U.S. social security or tax identification number, if any)

Conversion calculations:
                                                     ------------------------
                                                     Date of Conversion

                                                     ------------------------
                                                     Applicable Conversion Price

                                                     $
----------                                           ------------------------
Total number of shares                               Accrued Interest
(assuming interest payable
 in shares of Common Stock)                          [Name of Holder]

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

                                     -A16-
<PAGE>

                            HMG WORLDWIDE CORPORATION

                     7% CONVERTIBLE NOTE DUE MARCH 15, 2003

================================================================================

                                 ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to

--------------------------------
(Print or type assignee's name, address and zip code)

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

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

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

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

       (Insert assignee's social security or tax identification number, if any)

and irrevocably appoint__________________________
agent to transfer this Note on the books of the Company.  The agent may
substitute another to act for him.

Date:
     --------                                         --------------------------
                                                      (Sign exactly as your name
                                                        appears on the face of
                                                               this Note)

                                     -A17-<PAGE>

================================================================================

                          SECURITIES PURCHASE AGREEMENT

                                     between

                            HMG WORLDWIDE CORPORATION

                                       and

                                SOCIETE GENERALE

                                   dated as of

                                 March 15, 2000

================================================================================

<PAGE>

                          SECURITIES PURCHASE AGREEMENT

         SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of March 15,
2000, between HMG WORLDWIDE CORPORATION, a Delaware corporation (the "Company"),
and Societe Generale, a bank organized under the laws of France (the
"Purchaser").

                              W I T N E S S E T H :

         WHEREAS, the Company proposes to issue and sell U.S. $1,500,000
aggregate principal amount of the Company's 7% Convertible Notes Due March 15,
2003 (the "Notes")on a private placement basis pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"), and the Purchaser desires to purchase the Notes from the
Company, on the terms and subject to the conditions set forth herein.

         WHEREAS, the Notes will be convertible into shares of common stock, par
value $.01 per share, of the Company (the "Common Stock"), pursuant to the terms
of the Notes, and the holders of the Notes will have registration rights with
respect to such shares of Common Stock issuable upon conversion of the Notes
(the "Conversion Shares") pursuant to the terms of the Registration Rights
Agreement dated as of the date hereof, between the Company and the Purchaser
(the "Registration Rights Agreement").

         NOW THEREFORE, in consideration of the premises, the representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, intending to be legally bound hereby, the parties hereto agree as
follows:

                                    ARTICLE I

                                   DEFINITIONS

         SECTION 1.01. Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:

         "Affiliate" of a Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first mentioned Person. The term "control"
(including the terms "controlling," "controlled by" and "under common control
with") means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.

         "Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock, including each class of common stock and preferred stock of such Person.

         "Closing" has the meaning set forth in Section 2.02.

         "Commission" means the United States Securities and Exchange
Commission.

<PAGE>

         "Current 10-K" means the Company's Annual Report on Form 10-K for the
year ended December 31, 1999.

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

         "Governmental Authority" means any federal, state or other political
subdivision thereof and any agency or other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

         "Material Adverse Effect" has the meaning set forth in Section 3.01.

         "Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
Governmental Authority or other entity of any kind.

         "SEC Reports" means the Company's Annual Report on Form 10-K for the
year ended December 31, 1998.

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

         "Transaction Documents" means, collectively, this Agreement, the
Registration Rights Agreement and the Notes.

         "United States" has the meaning ascribed to such term in Rule 902(p) of
Regulation S under the Securities Act.

         "U.S. Person" has the meaning ascribed to such term in Rule 902(o) of
Regulation S under the Securities Act.

         "Year 2000 Compliant" means, with respect to a Person's information
technology, the information technology is designed to be used prior to, during,
and after the calendar Year 2000 A.D., and the information technology used
during each such time period will accurately receive, provide and process
date/time data (including, but not limited to, calculating, comparing and
sequencing) from, into and between the twentieth and twenty-first centuries,
including the years 1999 and 2000, and leap year calculations and will not
malfunction, cease to function, or provide invalid or incorrect results as a
result of date/time data, to the extent that other information technology, used
in combination with the information technology being acquired, properly
exchanges date/time data with it.

                                   ARTICLE II

                                SALE AND PURCHASE

         SECTION 2.01. Agreement to Sell and to Purchase; Purchase Price. On the
terms and subject to the conditions set forth in this Agreement, the Company
hereby agrees to issue and sell to the Purchaser, and the Purchaser hereby
agrees to purchase from the Company, U.S. $1,500,000 aggregate principal amount
of Notes at an aggregate purchase price of $1,500,000,

                                      -2-
<PAGE>

payable in immediately available funds (the "Purchase Price"). A copy of the
form of the Notes is attached as Exhibit A hereto, and the terms thereof are
hereby expressly incorporated by reference herein.

         SECTION 2.02. Closing. The closing of the sale and purchase of the
Notes (the "Closing") shall be deemed to take place on March 15, 2000, on which
date the Purchaser paid the Purchase Price for the Notes and as of which date
the Company executed, issued and delivered the Notes to the Purchaser in
denominations as requested by the Purchaser. As soon as reasonably practicable
subsequent to the Closing, the following additional closing transactions shall
take place in connection with the Closing: (i) the Company shall pay the
expenses set forth in Section 6.02 hereof by wire transfer to the account
designated by the Purchaser; (ii) the Company and the Purchaser shall execute
and deliver this Agreement and the Registration Rights Agreement; (iii) the
Company shall deliver to the Purchaser a certificate executed by the Secretary
of the Company, signing in such capacity, dated the date of the Closing (A)
certifying that attached thereto are true and complete copies of the resolutions
duly adopted by the Board of Directors of the Company authorizing the execution
and delivery of the Transaction Documents and the consummation of the
transactions contemplated thereby (including, without limitation, the issuance
and sale of the Notes and the reservation and issuance of the Conversion Shares
upon conversion of the Notes), which authorization shall be in full force and
effect on and as of the date of such certificate, and (B) certifying and
attesting to the office, incumbency, due authority and specimen signatures of
each Person who executed any Transaction Document for or on behalf of the
Company; and (iv) Parker Duryee Rosoff & Haft, a professional corporation,
counsel to the Company, shall deliver to the Purchaser an opinion, dated the
date of the Closing and addressed to the Purchaser, in form and substance
acceptable to the Purchaser.

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         As a material inducement to the Purchaser to purchase the Notes, the
Company hereby represents and warrants to the Purchaser that on and as of the
date hereof:

         SECTION 3.01. Organization and Standing. The Company and each of its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority, and all authorizations, licenses,
permits and certifications necessary for it to own its properties and assets and
to carry on its business as it is now being conducted (and as described in the
SEC Reports) and proposed to be conducted. The Company and each of its
subsidiaries is duly qualified to transact business and is in good standing in
each jurisdiction in which the character of the properties owned or leased by it
or the nature of its businesses makes such qualification necessary, except where
the failure to so qualify or be in good standing would not have a material
adverse effect on the business, assets, operations, properties, condition
(financial or otherwise) or prospects of the Company and its subsidiaries, taken
as a whole, or any material adverse effect on the Company's ability to
consummate the transactions contemplated by, and to execute, deliver and perform
its obligations under, each of the Transaction Documents (a "Material Adverse
Effect").

                                      -3-
<PAGE>

         SECTION 3.02. Securities of the Company. The authorized Capital Stock
of the Company consists 50,000,000 shares of Common Stock, of which 12,992,586
shares were issued and outstanding as of March 15, 2000. Except as set forth in
the SEC Reports, the Company has no other authorized, issued or outstanding
equity securities or securities containing any equity features, or any other
securities convertible into, exchangeable for or entitling any person to
otherwise acquire any other securities of the Company containing any equity
features. All of the outstanding shares of Capital Stock of the Company have
been duly and validly authorized and issued, and are fully paid and
nonassessable. The Notes and all of the Conversion Shares have been duly and
validly authorized. When issued against payment therefor as provided in this
Agreement, the Notes will be validly issued and will constitute valid and
enforceable obligations of the Company, enforceable against the Company in
accordance with their terms (subject to the effects of applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general principles of equity). When issued
upon conversion of the Notes, the Conversion Shares will be validly issued,
fully paid and nonassessable, free and clear of all preemptive rights, claims,
liens, charges, encumbrances and security interests of any nature whatsoever
(unless created by the Purchaser). A sufficient number of shares of Common Stock
has been duly reserved and will remain available for issuance upon conversion of
the Notes. Except as set forth in the SEC Reports, there are no outstanding
options, warrants, agreements, conversion rights, subscription rights,
preemptive rights, rights of first refusal or other rights or agreements of any
nature outstanding to subscribe for or to purchase any shares of Capital Stock
of the Company or any other securities of the Company of any kind. Neither the
issuance of the Notes nor the Conversion Shares is subject to any preemptive
rights, rights of first refusal or other similar limitation. Except as otherwise
required by law, there are no restrictions upon the voting or transfer of any
shares of the Company's Capital Stock pursuant to the Company's organizational
and other governing documents. There are no agreements or other obligations
(contingent or otherwise) that may require the Company to repurchase or
otherwise acquire any shares of its Capital Stock.

         SECTION 3.03. Authorization; Enforceability. The Company has the
corporate power and authority to execute, deliver and perform the terms and
provisions of each of the Transaction Documents, and has taken all necessary
corporate action to authorize the execution, delivery and performance by it of
each of the Transaction Documents and to consummate the transactions
contemplated thereby to be performed by it. No other corporate proceedings on
the part of the Company are necessary, and no consent of the shareholders of the
Company is required, for the valid execution and delivery by the Company of the
Transaction Documents and the performance and consummation by the Company of the
transactions contemplated thereby to be performed by it. The Company has duly
executed and delivered each of the Transaction Documents. Assuming the due
execution and delivery of this Agreement and the Registration Rights Agreement
by the Purchaser, the Transaction Documents constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

                                      -4-
<PAGE>

         SECTION 3.04.  No Violation; Consents.

                  (a) The execution, delivery and performance by the Company of
the Transaction Documents and the consummation of the transactions contemplated
thereby to be performed by it do not and will not (i) contravene the applicable
provisions of any law, statute, rule, regulation, order, writ, injunction,
judgment or decree of any court or Governmental Authority to or by which the
Company or any of its subsidiaries or any of its respective property or assets
is bound, (ii) violate, result in a breach of or constitute (with due notice or
lapse of time or both) a default or give rise to an event of acceleration under
any contract, lease, loan or credit agreement, mortgage, security agreement,
trust indenture or other agreement or instrument to which the Company is a party
or by which it or any of its subsidiaries is bound or to which any of its
respective properties or assets is subject, nor result in the creation or
imposition of any lien, security interest, charge or encumbrance of any kind
upon any of the properties, assets or Capital Stock of the Company or any of its
subsidiaries, or (iii) violate any provision of the organizational and other
governing documents of the Company or any of its subsidiaries.

         (b) No consent, approval, authorization or order of, or filing or
registration with, any court or Governmental Authority or other Person is
required to be obtained or made by the Company for the execution, delivery and
performance of the Transaction Documents or the consummation of any of the
transactions contemplated thereby (other than the registration of the resale of
the Conversion Shares with the SEC and pursuant to any state "blue sky" laws as
contemplated by the Registration Rights Agreement), except for those consents or
authorizations previously obtained and those filings previously made.

         SECTION 3.05. Securities Act Representations. The Company has not
offered or sold and will not offer or sell any Notes in this offering other than
the Notes. Assuming the accuracy of the Purchaser's representations pursuant to
Section 4.02 hereof, the sale of the Notes hereunder is, and the issuance of the
Conversion Shares upon conversion of the Notes will be, exempt from the
registration requirements of the Securities Act. Neither the Company, nor any of
its Affiliates, or, to its knowledge, any Person acting on its or their behalf
has engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D under the Securities Act) in connection with the
offer or sale of the Notes or Conversion Shares. Neither the Company, nor any of
its Affiliates, nor to its knowledge, 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 other than pursuant to this Agreement,
under circumstances that would require registration under the Securities Act of
the Notes to be issued under this Agreement. The Company is eligible to use Form
S-3 under the Securities Act to file the Registration Statement as defined in
the Registration Rights Agreement. The Company has not provided the Purchaser
with any material non-public information or any information that, according to
applicable law, rule or regulation, should have been disclosed publicly by the
Company prior to engaging in the transactions contemplated by the Transaction
Documents but that has not been so disclosed.

         SECTION 3.06. Solvency; No Default. (a) The Company is, and upon giving
effect to the transactions contemplated hereby to be performed by it will be,
Solvent (as defined below). "Solvent" means that, as of the date of
determination, (i) the then fair saleable value of the assets of the Company
exceeds the then total amount of its debts and other liabilities (including any
guarantees and other contingent, subordinated, unmatured or unliquidated
liabilities whether or

                                      -5-
<PAGE>

not reduced to judgment, disputed or undisputed, secured or unsecured), (ii) the
Company has sufficient funds and cash flow to pay its liability on its existing
and anticipated debts as they become absolute and matured, (iii) final judgments
against the Company in pending or threatened actions for money damages will not
be rendered at a time when, or in an amount such that, the Company will be
unable to satisfy any such judgments promptly in accordance with their terms
(taking into account the maximum reasonable amount of such judgments in any such
actions (other than amounts that would be remote) and the earliest reasonable
time at which such judgments would be rendered), and (iv) the Company does not
have unreasonably small capital with which to engage in its present or
anticipated business.

         (b) The Company is not, and immediately after the consummation of the
transactions contemplated hereby to be performed by it will not be, in default
under or in violation of (whether upon the passage of time, the giving of notice
or both), its organizational and other governing documents, or any provision of
any security issued by the Company, or of any agreement, instrument or other
undertaking to which the Company is a party or by which it or any of its
property or assets is bound, or the applicable provisions of any law, statute,
rule, regulation, order, writ, injunction, judgment or decree of any court or
Governmental Authority to or by which the Company or any of its property or
assets is bound) which default or violation, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

         SECTION 3.07. No Brokers. No broker, finder, agent or similar
intermediary is entitled to any broker's, finder's, placement or similar fee or
other commission in connection with the transactions contemplated hereby based
on any agreement, arrangement or understanding with the Company.

         SECTION 3.08. SEC Reports; Financial Condition; No Adverse Changes. (a)
The audited financial statements of the Company and the related notes thereto as
at December 31, 1999 (the "Financial Statements") reported on by Friedman Alpren
& Green LLP, independent accountants, to be included in the Current 10-K, will
present fairly the financial condition, results of operations and cash flows of
the Company at such date and for the periods set forth therein. The Financial
Statements, including the related schedules and notes thereto (if any), will
have been prepared in accordance with generally accepted accounting principles
as set forth in the opinions and pronouncements of the Accounting Principles
Board of American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board as in effect on the
date of filing of such documents with the Commission, applied on a consistent
basis (except for changes concurred in by the Company's independent public
accountants) unless otherwise expressly stated therein. During the period from
January 1, 2000 to and including the date hereof, there has been no sale,
transfer or other disposition by the Company of any material part of the
business, property or securities of the Company and no purchase or other
acquisition of any business, property or securities by the Company material in
relation to the financial condition of the Company.

         (b) Except as are fully reflected or reserved against in the Financial
Statements and the notes thereto, there are no liabilities or obligations with
respect to the Company or any of its subsidiaries of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and

                                      -6-
<PAGE>

whether or not due) that, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

         (c) Since December 31, 1999, there has been no development or event,
nor any prospective development or event known to the Company or any of its
subsidiaries, or any litigation, proceeding or other action seeking an
injunction or other restraining order, damages or other relief from a court or
administrative agency of competent jurisdiction pending, threatened or, to the
best knowledge of the Company, contemplated, or any action of any Governmental
Authority, that has had or could reasonably be expected to have a Material
Adverse Effect.

         SECTION 3.09. Use of Proceeds; Federal Regulations. No part of the net
proceeds from the sale of the Notes will be used for any purposes in violation
of the provisions of Regulation T, U or X of the Board of Governors of the
Federal Reserve System.

         SECTION 3.10. Subsidiaries. As of the date hereof, the Company has the
subsidiaries listed on Exhibit 21 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1998.

         SECTION 3.11. Year 2000 Compliance. The Company and its subsidiaries
are Year 2000 Compliant. To the best knowledge of the Company, each of the
suppliers, vendors and customers material to the operations of the Company and
its subsidiaries is Year 2000 Compliant.

         SECTION 3.12 No Integrated Offering. Neither the Company, nor any of
its Affiliates, nor to its knowledge 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 require
registration under the Securities Act of the offer and sale of the Notes.

         SECTION 3.13 No Litigation. No litigation or claim (including those for
unpaid taxes), or environmental proceeding against the Company or any of its
subsidiaries is pending, threatened or, to the Company's best knowledge,
contemplated and no other event has occurred, that if determined adversely would
have a Material Adverse Effect on the Company.

         SECTION 3.14. Environmental Matters. The Company and each of its
subsidiaries are in compliance in all material respects with all applicable
state and federal environmental laws, and no event or condition has occurred
that may interfere with the compliance by the Company or any of its subsidiaries
with any environmental law or that may give rise to any liability under any
environmental law that, individually or in the aggregate, would have a Material
Adverse Effect.

         SECTION 3.15. Intellectual Property. The Company (and/or its
subsidiaries) owns or has licenses to use certain patents, copyrights and
trademarks ("intellectual property") associated with its business. The Company
and its subsidiaries have all intellectual property rights that are needed to
conduct the business of the Company and its subsidiaries as it is now being
conducted or as proposed to be conducted as disclosed in the SEC Reports. The
Company has no reason to believe that the intellectual property rights that it
(and/or its subsidiaries) owns are invalid or

                                      -7-
<PAGE>

unenforceable or that the use of such intellectual property by the Company
(and/or its subsidiaries) infringes upon or conflicts with any right of any
third party, and neither the Company nor any of its subsidiaries has received
notice of any such infringement or conflict. The Company has no knowledge of any
infringement of its (and/or its subsidiaries) intellectual property by any third
party.

         SECTION 3.16 Insurance. The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
subsidiaries are engaged. The Company has no reason to believe that it and its
subsidiaries 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.

         SECTION 3.17. Disclosure. The representations and warranties of the
Company in this Agreement and the statements contained in the SEC Reports and
the schedules, certificates and exhibits furnished to the Purchaser by or on
behalf of the Company in connection herewith do not contain any untrue statement
of a material fact and do not omit to state any material fact necessary to make
the statements herein or therein not misleading. The SEC Reports contain all
material information concerning the Company required to be set forth therein,
and no event or circumstance has occurred or exists since December 31, 1999 that
would require the Company to disclose such event or circumstance in order to
make the statements in the SEC Reports not misleading as of the date of the
Closing but that has not been so disclosed. The Company hereby acknowledges that
the Purchaser is and will be relying on the SEC Reports and the Company's
representations, warranties and covenants contained herein in making an
investment decision with respect to the Notes and Conversion Shares and will be
relying thereon (together with future reports filed with the Commission) in
connection with any transfer of the Notes and the Conversion Shares.

                                   ARTICLE IV

           REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER

         The Purchaser hereby acknowledges, represents, warrants and covenants
to the Company as follows:

         SECTION 4.01.  Authorization; Enforceability; No Violations.

                  (a) The Purchaser is a bank, duly organized, validly existing
and in good standing under the laws of France, and has all requisite corporate
power and authority to execute, deliver and perform the terms and provisions of
this Agreement and has taken all necessary corporate action to authorize the
execution, delivery and performance by it of this Agreement and to consummate
the transactions contemplated hereby.

         (b) The execution, delivery and performance by the Purchaser of this
Agreement and the consummation by the Purchaser of the transactions contemplated
hereby do not and will not violate any provision of (i) the Purchaser's
organizational documents or (ii) any law, statute, rule,

                                      -8-
<PAGE>

regulation, order, writ, injunction, judgment or decree to which the Purchaser
is subject. The Purchaser has duly executed and delivered this Agreement.
Assuming the due execution hereof by the Company, this Agreement constitutes the
legal, valid and binding obligation of the Purchaser, enforceable against the
Purchaser in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

         SECTION 4.02.  Securities Act Representations; Legends.

         (a) The Purchaser understands that: (i) the offering and sale of the
Notes to be issued and sold hereunder is intended to be exempt from the
registration requirements of the Securities Act; (ii) neither the Notes nor the
Conversion Shares have been registered under the Securities Act or any other
applicable securities laws and such securities may be resold only if registered
under the Securities Act or if an exemption from such registration requirements
is available; and (iii) the Company is required to register any resale of the
Notes or the Conversion Shares under the Securities Act and any other applicable
securities laws only to the extent provided in the Registration Rights
Agreement.

         (b) The Notes to be acquired by the Purchaser pursuant to this
Agreement are being acquired for its own account, for investment purposes, and
not with a view to, or for sale in connection with, any distribution thereof or
of Conversion Shares issuable upon conversion of the Notes in violation of the
Securities Act or any other securities laws that may be applicable.

         (c) The Purchaser is not an affiliate of the Company (as such term is
defined in the Securities Act).

         (d) The Purchaser is not a U.S. Person and, at the time the buy order
for the Notes being purchased hereunder was originated, the Purchaser was
outside of the United States.

         (e) The Purchaser (i) has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating the merits and
risks of its investment in the Notes and is capable of bearing the economic
risks of such investment, including a complete loss of its investment in the
Notes; (ii) believes that its investment in the Notes is suitable for it based
upon its objectives and financial needs, and the Purchaser has adequate means
for providing for its current financial needs and business contingencies and has
no present need for liquidity of investment with respect to the Notes; (iii) has
no present plan, intention or understanding and has made no arrangement to sell
the Notes or the Conversion Shares at any predetermined time or for any
predetermined price; (iv) has not purchased, sold or entered into, any put
option, short position or similar arrangement with respect to the Common Stock,
and will not, for so long as it owns any Notes or Conversion Shares, purchase,
sell or enter into, any such put option, short position or similar arrangement
with respect to any Conversion Shares in any manner that violates the provisions
of the Securities Act or the Exchange Act.

         (f) No oral or written statements or representations have been made to
the Purchaser by or on behalf of the Company in connection with the offering and
sale of the Notes hereunder other than those set forth in the SEC Reports, the
Notes or as set forth herein, and the Purchaser

                                      -9-
<PAGE>

is not subscribing for the Notes as a result of, or in response to, any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, or
presented at any seminar or meeting.

         (g) The Purchaser acknowledges that the Securities Act restricts the
transferability of securities, such as the Notes and Conversion Shares, issued
in reliance upon the exemption from the registration requirements of the
Securities Act provided by Section 4(2) thereunder, and that, subject to Section
5.02 hereof, the certificates representing the Notes and the Conversion Shares
will bear a legend in substantially the form included in the form of the Notes
attached as Exhibit A hereto by which the Purchaser and each subsequent holder
of such securities will be bound.

         (h) The Purchaser acknowledges that as the Common Stock is currently
quoted on a U.S. automated interdealer quotation system, Rule 144A under the
Securities Act may not be available with respect to resales of the Notes or the
Conversion Shares.

         SECTION 4.03. No Brokers. No broker, finder, agent or similar
intermediary is entitled to any broker's, finder's, placement or similar fee or
other commission in connection with the transactions contemplated hereby based
on any agreement, arrangement or understanding with the Purchaser.

         SECTION 4.04. No Influence on Business. The Purchaser (whether in its
capacity as holder of the Notes and/or any of the Conversion Shares or
otherwise) covenants and agrees with the Company that it will not: (a) in any
manner exercise or attempt to exercise a controlling influence over the
management or policies of the Company or attempt to influence the business
activities or decisions or the Company; (b) propose a director or slate of
directors to serve on the board of directors of the Company; (c) have or seek to
have a representative of the Purchaser be appointed to serve as a director of
the Company or participate as an observer at meetings of the board of directors
(or committees thereof) or have or seek to have any employee or representative
of the Purchaser serve as an officer, agent or employee of the Company; (d)
attempt to influence the dividend policies or practices of the Company; (e)
solicit or participate in soliciting proxies with respect to any matter
presented to the shareholders of the Company; (f) dispose or threaten to dispose
of the Notes or Conversion Shares to any third party in any manner as a
condition to specific action or non-action by the Company; or (g) enter into any
joint venture, enterprise or undertaking of any kind with the Company.

         Section 4.05. Limitations on Resales. The Purchaser covenants and
agrees that it (together with its Affiliates) will not transfer the Notes to any
Person (together with such Person's Affiliates), other than the Company or
Affiliates of the Purchaser, in a transaction or series of transactions, in an
aggregate principal amount in excess of such principal amount as would be
convertible at the date of transfer into in excess of 2% of the issued and
outstanding shares of Common Stock of the Company (based upon the applicable
Conversion Price (as defined in the Notes) and number of shares of Common Stock
of the Company issued and outstanding on the applicable date of transfer and
without giving effect to any limitations on conversion set forth in the Notes).
The Purchaser further covenants and agrees that it will not knowingly transfer
to any Person (together with such Person's Affiliates), other than the Company
or Affiliates of the Purchaser, in a transaction or series of transactions,
Conversion Shares in an aggregate amount in excess of 2% of the issued and
outstanding shares of Common Stock of the Company (based upon the number of
shares of

                                      -10-
<PAGE>

Common Stock of the Company issued and outstanding on the applicable date of
transfer); in furtherance thereof, the Purchaser covenants and agrees that it
shall not during any five consecutive trading days transfer Conversion Shares in
secondary market transactions in which the identity of the acquiror is not known
to the Purchaser in an amount in excess of 2% of the issued and outstanding
shares of Common Stock of the Company (based upon the number of shares of Common
Stock of the Company issued and outstanding on the applicable date of transfer).
The Purchaser covenants and agrees that the foregoing transfers to third parties
shall be made in bona fide, arms-length transactions and that upon any such
transfer, it will not retain the power to control the disposition of the
securities transferred or, in the case of Conversion Shares, to direct the
voting with respect thereto.

                                    ARTICLE V

                            COVENANTS OF THE COMPANY

         SECTION 5.01.  Exemption from Registration.

               The Company will not make any offer to sell, solicit any offer to
buy, agree to sell or sell any security or right to acquire any security, except
at such time and in such manner so as not to cause the loss of any of the
exemptions for the offer and sale of the Notes hereunder and for the issuance of
the Conversion Shares upon conversion of the Notes from the registration
requirements under the Securities Act or under the securities or "blue sky" laws
of any jurisdiction in which such offer, sale or issuance is made. Without
limiting the generality of the foregoing, the Company will not make any offer to
sell, solicit any offer to buy, agree to sell or sell any securities similar in
tenor to the Notes or right to acquire any securities similar in tenor to the
Notes during the period commencing on the date of the Closing and ending one
hundred and eighty (180) days thereafter.

         SECTION 5.02 Transfer Restrictions. (a) The Purchaser acknowledges that
any proposed offer, sale, pledge or other transfer of the Notes or the
Conversion Shares prior to the date that is two (2) years from the Closing (or
such other date as may be required pursuant to Rule 144 under the Securities Act
(or similar successor provision) as in effect from time to time), in the absence
of registration under the Securities Act, is limited. Accordingly, prior to such
passage of time or such registration, the Notes or the Conversion Shares may be
offered, sold, pledged or otherwise transferred only to (i) the Company, (ii) in
an offshore transaction in accordance with Rule 904 under the Securities Act,
(iii) pursuant to any other exemption from registration provided by the
Securities Act, or (iv) pursuant to Rule 144 under the Securities Act, to the
extent such rule is available; in the case of any transfer pursuant to clause
(ii), (iii) or (iv), the Company shall be entitled to receive an opinion of
counsel, in form and substance reasonably satisfactory to the Company, to the
effect that registration is not required in connection with such disposition.
Any Notes or Conversion Shares sold to the Company may not be reissued or
resold.

         (b) The Company agrees to issue certificates representing the Notes or
Conversion Shares without the legend referenced in Section 4.02(g) above at such
time as (i) the holder thereof is permitted to dispose of such Notes or
Conversion Shares pursuant to Rule 144 (k) under the Securities Act, (ii) such
Notes or Conversion Shares are sold to a purchaser or

                                      -11-
<PAGE>

purchasers who (in the opinion of counsel to the seller or such purchaser(s), in
form and substance reasonably satisfactory to the Company) are able to dispose
of such securities publicly without registration under the Act and such legend
is no longer required to be included on the certificates representing the Notes
or Conversion Shares or (iii) the Notes or Conversion Shares are sold pursuant
to an effective registration statement under the Securities Act.

         (c) In the alternative to physical delivery of certificates for
Conversion Shares, if delivery of the Conversion Shares pursuant to any
conversion thereunder may be effectuated by electronic book-entry through The
Depositary Trust Company ("DTC"), delivery of Conversion Shares pursuant to such
conversion shall, if requested by the Purchaser (or the registered holder of
Conversion Shares), settle by book-entry transfer through DTC by the third
trading day following the Date of Conversion (as defined in the Notes). The
parties agree to coordinate with DTC to accomplish this objective.

         SECTION 5.03. Rules 144; Current Information. For so long as any Notes
or Conversion Shares are outstanding, the Company will (i) cause its Common
Stock to continue to be registered under Section 12 of the Exchange Act, file
all reports required to be filed by it under the Securities Act and the Exchange
Act and will take such further actions as the Purchaser may reasonably request,
all to the extent required from time to time to enable the Purchaser to sell the
Notes and Conversion Shares without registration under the Securities Act
pursuant to the safe harbors and exemptions provided by Rule 144 under the
Securities Act (to the extent such rule is applicable), as such rules may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission, and (ii) furnish the Purchaser with all reports, proxy
statements and registration statements that the Company files with the
Commission or distributes to its securityholders pursuant to the Securities Act
and the Exchange Act at the times of such filings and distributions. Upon the
request of the Purchaser, the Company will deliver to the Purchaser a written
statement as to whether it has complied with the foregoing requirements.

         SECTION 5.04. Reservation of Conversion Shares. The Company shall
initially reserve and keep available, free from preemptive rights, out of its
authorized but unissued shares of Common Stock or its issued shares of Common
Stock held in its treasury, or both, a number of shares of Common Stock equal to
Maximum Share Issuance (as defined in the Notes) to provide for the issuances of
the Conversion Shares and shall at all times maintain as so reserved and
available, sufficient shares of Common Stock to provide for the issuance of the
Conversion Shares in an amount equal to the maximum number of Conversion Shares
which may be issued.

         SECTION 5.05. Stock Listing. The Company shall have the Conversion
Shares in an amount equal to a number of shares of Common Stock equal to the
Maximum Share Issuance approved for quotation or listing, prior to issuance,
upon the Approved Market (as defined in the Note) upon which the Common Stock is
listed or traded at the time of issuance of the Conversion Shares.

                                   ARTICLE VI

                                  MISCELLANEOUS

                                      -12-
<PAGE>

         SECTION 6.01. Press Releases and Disclosure. No party hereto shall
issue any press release or make any other public disclosure related to this
Agreement or any of the transactions contemplated hereby without the prior
written approval of the other party hereto, except as may be necessary or
appropriate in the opinion of the party seeking to make disclosure to comply
with the requirements of applicable law or stock exchange rules. If any such
press release or public disclosure is so required, the party making such
disclosure shall consult with the other party prior to making such disclosure,
and the parties shall use all reasonable efforts, acting in good faith, to agree
upon a text for such disclosure that is satisfactory to all parties.

         SECTION 6.02. Expenses. Except as otherwise expressly provided for
herein, the Company will pay all of its and all of the Purchaser's expenses
(including reasonable attorneys' fees and expenses) in connection with the
negotiation of the Transaction Documents, the performance of due diligence of
the Purchaser thereunder, and the consummation of the transactions contemplated
thereby (whether the transactions contemplated hereby are consummated or not).
Such expenses of the Purchaser shall be payable at the Closing and may be netted
against the Purchase Price otherwise payable by the Purchaser. In addition to
the foregoing, as provided in the Registration Rights Agreement, the Company
will also pay all of its and all of the Purchaser's expenses (including
reasonable attorneys' fees and expenses) in connection with the review of the
Registration Statement contemplated by the Registration Rights Agreement, the
conduct of due diligence in connection therewith (including the review of
opinions of counsel and comfort letters), and all matters related thereto; the
Company agrees to promptly pay such expenses, as incurred by the Purchaser.

         SECTION 6.03. Notices. All notices, demands, requests, consents,
approvals or other communications required or permitted to be given hereunder or
that are given with respect to this Agreement shall be in writing and shall be
personally served or deposited in the mail, registered or certified, return
receipt requested, postage prepaid, or delivered by reputable air courier
service with charges prepaid, or transmitted by hand delivery, telegram, telex
or facsimile, addressed as set forth below, or to such other address as such
party shall have specified most recently by written notice: (i) if to the
Company, to: HMG Worldwide Corporation, 475 Tenth Avenue, New York, New York
10018-1199, Attention: Chief Financial Officer, Facsimile No.: (212) 564-3395;
with copies (which shall not constitute notice) to: Parker Duryee Rosoff & Haft,
529 Fifth Avenue, New York, New York 10017, Attention: Herbert Kozlov, Esq.,
Facsimile No.: (212) 972-9487; and (ii) if to the Purchaser: c/o SG Cowen
Securities Corporation, 1221 Avenue of the Americas, New York, New York 10020,
Attention: Guillaume Pollet, Facsimile No.: (212) 278-5467 with copies (which
shall not constitute notice) to: Jones, Day, Reavis & Pogue, 599 Lexington
Avenue, New York, New York 10022, Attention: J. Eric Maki, Esq., Facsimile No.
(212) 755-7306. Notice shall be deemed given on the date of service or
transmission if personally served or transmitted by telegram, telex or
facsimile. Notice otherwise sent as provided herein shall be deemed given on the
third business day following the date mailed or on the next business day
following delivery of such notice to a reputable air courier service.

         SECTION 6.04. Entire Agreement. This Agreement (together with the other
Transaction Documents and all other documents delivered pursuant hereto and
thereto) constitutes the entire agreement of the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous agreements,
representations, understandings,

                                      -13-
<PAGE>

negotiations and discussions between the parties, whether oral or written, with
respect to the subject matter hereof.

         SECTION 6.05. Amendment and Waiver. This Agreement may not be amended,
modified, supplemented, restated or waived except by a writing executed by the
party against which such amendment, modification or waiver is sought to been
enforced. Waivers may be made in advance or after the right waived has arisen or
the breach or default waived has occurred. Any waiver may be conditional. No
waiver of any breach of any agreement or provision herein contained shall be
deemed a waiver of any preceding or succeeding breach thereof nor of any other
agreement or provision herein contained. No waiver or extension of time for
performance of any obligations or acts shall be deemed a waiver or extension of
the time for performance of any other obligations or acts.

         SECTION 6.06. Assignment; No Third Party Beneficiaries. This Agreement
and the rights, duties and obligations hereunder may not be assigned or
delegated by either the Company, on the one hand, or the Purchaser, on the other
hand, without the prior written consent of the other party hereto; provided that
the Purchaser may assign or delegate its rights, duties and obligations
hereunder to any Affiliate of the Purchaser. Except as provided in the preceding
sentence, any purported assignment or delegation of rights, duties or
obligations hereunder made without the prior written consent of the other party
hereto shall be void and of no effect. This Agreement and the provisions hereof
shall be binding upon and shall inure to the benefit of each of the parties and
their respective successors and permitted assigns. This Agreement is not
intended to confer any rights or benefits on any Persons other than as set forth
above.

         SECTION 6.07. Severability. This Agreement shall be deemed severable,
and the invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.

         SECTION 6.08. Further Assurances. Each party hereto, upon the request
of any other party hereto, shall do all such further acts and execute,
acknowledge and deliver all such further instruments and documents as may be
necessary or desirable to carry out the transactions contemplated by this
Agreement.

         SECTION 6.09. Titles and Headings. Titles, captions and headings of the
sections of this Agreement are for convenience of reference only and shall not
affect the construction of any provision of this Agreement.

         SECTION 6.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
INTERPRETED UNDER, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WITHIN THE
STATE OF NEW

                                      -14-
<PAGE>

YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

         SECTION 6.11. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, all of which taken
together shall constitute one and the same instrument.

         SECTION 6.12. Cure Of Breaches; Subsequent Events. (a) This Agreement
is being executed and delivered subsequent to the date hereof and subsequent to
the filing by the Company of its Current 10-K. Notwithstanding anything
contained herein to the contrary, the Company shall not be deemed in breach of
any representation or warranty contained herein on account of any representation
or warranty that may have been erroneous, inaccurate or incomplete as of the
date of this Agreement but that was not erroneous, inaccurate or incomplete as
of the date this Agreement is being executed and delivered and assuming, for
those purposes, that the definition of "SEC Reports" includes the Current 10-K.

             (b) Subsequent to the date hereof and subsequent to the date of
original issuance of the Notes, the Company and the Purchaser agreed to amend
and restate the Notes. Attached as Exhibit A hereto is the form of Note as so
amended and restated and all references in this Agreement and the other
transaction documents to the Notes shall, unless the context otherwise requires,
refer to the Notes as so amended and restated.

           IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by the undersigned, thereunto duly authorized, as of the date first
set forth above.

                                           HMG WORLDWIDE CORPORATION

                                           By:
                                               ---------------------------------
                                           Name:  Robert V. Cuddihy, Jr.
                                           Title: Chief Operating Officer and
                                                    Chief Financial Officer

                                           SOCIETE GENERALE

                                           By:
                                               ---------------------------------
                                           Name:  Guillaume Pollet
                                           Title: Authorized Signatory

                                      -15-

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